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:	2004-09
Authors:	Tröger, Thomas
Institutions:	University of Bonn, Germany
Subject:	asymmetric first-price auctions \| resale \| effciency

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Extent:	application/pdf
Series:	Bonn Econ Discussion Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	2 pages long
Classification:	D44 - Auctions
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10004968329