The Impact of Resale on 2-Bidder First-Price Auctions where One Bidder?s Value is Commonly Known

We consider 2-bidder first-price auctions where one bidder's value is commonly known. Such auctions induce an ineffcient allocation. We show that a resale opportunity, where the auction winner can make a take-it-or-leave-it offer to the loser, increases (reduces) the ineffciency of the market when the buyer with the commonly known value is weak (strong). Resale always reduces all bidders' payoffs and increases the initial seller's revenue.

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Year of publication:	2004
Authors:	Tröger, Thomas
Publisher:	Bonn : University of Bonn, Bonn Graduate School of Economics (BGSE)
Subject:	asymmetric first-price auctions \| resale \| efficiency

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Series:	Bonn Econ Discussion Papers ; 25/2004
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	477283268 [GVK] hdl:10419/22902 [Handle] RePEc:zbw:bonedp:252004 [RePEc]
Classification:	D44 - Auctions
Source:	EconStor

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