Asymmetric Auctions With Resale
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| Author | : Isa Emin Hafalir |
| Publisher | : |
| Total Pages | : 39 |
| Release | : 2006 |
| Genre | : |
| ISBN | : |
We study equilibria of first- and second-price auctions with resale in a model with independent private values. With asymmetric bidders, the resulting inefficiencies create a motive for post-auction trade. In our basic model, resale takes place via monopoly pricing - the winner of the auction makes a take-it-or-leave-it offer to the loser after updating his prior beliefs based on his winning. We show that a first-price auction with resale has a unique monotonic equilibrium. Our main result is that with resale, the expected revenue from a first-price auction exceeds that from a second-price auction. The results extend to other resale mechanisms: monopsony and, more generally, probabilistic k-double auctions. The inclusion of resale possibilities thus permits a general revenue ranking of the two auctions that is not available when these are excluded.
| Author | : Chintamani Jog |
| Publisher | : |
| Total Pages | : 246 |
| Release | : 2012 |
| Genre | : Auctions |
| ISBN | : |
| Author | : Madhurima Gupta |
| Publisher | : |
| Total Pages | : |
| Release | : 2000 |
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| Author | : Marco Pagnozzi |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2013 |
| Genre | : |
| ISBN | : |
We analyze the effects of resale through bargaining in multi-object uniform-price auctions with asymmetric bidders. The possibility of resale affects bidders' strategies, and hence the allocation of the objects on sale and the seller's revenue. Our experimental design consists of four treatments: one without resale and three resale treatments that vary both the bargaining mechanism and the amount of information available in the resale market. As predicted by theory: without resale, asymmetry among bidders reduces demand reduction; resale increases demand reduction by high-value bidders; low-value bidders speculate by bidding more aggressively with resale. Therefore, resale induces speculation and demand reduction which reduce auction efficiency. In contrast to what is usually argued, resale does not necessarily increase final efficiency and may not reduce the seller's revenue. Features of the resale market that tend to increase its efficiency also reduce the seller's revenue.
| Author | : Chintamani Jog |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2014 |
| Genre | : |
| ISBN | : |
We study first price asymmetric private value auctions with resale opportunities presented in seller's and buyer's markets. We offer experimental evidence on bidding behavior, prices, and resource allocation. Building upon the Hafalir and Krishna (2008) model, we find that bidders will bid higher in an auction if the resale market is a seller's market than a buyer's market. There is a price/revenue-efficiency trade-off established theoretically between these two resale regimes. In equilibrium, however, final efficiency is high irrespective of the resale market structure. Evidence of bid symmetrization and higher final efficiency is found in the buyer-advantaged resale case.
| Author | : Rodrigo Harrison |
| Publisher | : |
| Total Pages | : 12 |
| Release | : 2008 |
| Genre | : |
| ISBN | : |
| Author | : Marco Pagnozzi |
| Publisher | : |
| Total Pages | : 49 |
| Release | : 2015 |
| Genre | : |
| ISBN | : |
We analyze how the possibility of resale affects efficiency in multi-object uniform-price auctions with asymmetric bidders using a combination of theory and experiments. The resale market is modeled as an unstructured bargaining game between auction bidders. Our experimental design consists of four treatments that vary the (exogenous) probability that bidders participate in a resale market after the auction. In all treatments, the possibility of resale increases efficiency after the auction, but it also induces demand reduction by high-value bidders during the auction, which reduces auction efficiency. In contrast to what is usually argued, resale does not necessarily increase final efficiency. When there is a low probability of a resale market, final efficiency is actually lower than in an auction without resale.
| Author | : Gadi Fibich |
| Publisher | : |
| Total Pages | : 40 |
| Release | : 2003 |
| Genre | : Auctions |
| ISBN | : |
| Author | : Eric Maskin |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2010 |
| Genre | : |
| ISBN | : |
The revenue-equivalence theorm for auctions predicts that expected seller revenue is independent of the bidding rules, as long as equilibrium has the properties that the buyer with the highest reservation price wins and any buyer with the lowest possible reservation price has zero expected surplus. Thus, in particular, the two most common auction institutions-the open 'English' and the sealed high-bid auction-are equivalent despite their rather different strategic properties.
| Author | : Paul Pezanis-Christou |
| Publisher | : |
| Total Pages | : 52 |
| Release | : 1995 |
| Genre | : Auctions |
| ISBN | : |
