Speculation in First-Price Auctions with Resale

We analyze first-price auctions with two asymmetric bidders, where the winner can offer the good for resale to the loser. One bidder has a private value for the good, the other bidder - the speculator - has zero value. We show that, independently of the resale market rules, the speculator's expected profit equals zero. Nevertheless, the opportunity for resale can create a role for an active speculator, destroy the efficiency of the auction, and increase the initial seller's expected revenue.