Unraveling of value-rankings in auctions with resale

Sanyyam Khurana ()

Review of Economic Design, 2024, vol. 28, issue 2, No 8, 455-483

Abstract: Abstract Consider a single-unit auction with resale and two risk neutral bidders. The ranking of the valuations is known to both the bidders—that is, the bidders know the identity of the highest and lowest valuation bidders. We show that, when the value-rankings are revealed, the classic result of “bid symmetrization” does not hold. Surprisingly, the bidder with the lowest valuation produces a stronger bid distribution than the bidder with the highest valuation. We also show that the revelation of value-rankings in auctions with resale asymmetrizes the bidding strategies. Finally, for a special family of probability distributions, we show that the first-price auction is revenue superior to the second-price auction.

Keywords: Resale; Asymmetry; Private values; Value-rankings (search for similar items in EconPapers)
JEL-codes: D44 D82 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (2)

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Working Paper: Unraveling of Value-Rankings in Auctions with Resale (2020)
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DOI: 10.1007/s10058-023-00347-5

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