Asymmetric Auctions with Resale

We study 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 which, in our model, takes place via monopoly pricing—the winner makes a take-it-or-leave-it offer to the loser. We show (a) a first-price auction with resale has a unique monotonic equilibrium; and (b) with resale, the expected revenue from a first-price auction exceeds that from a second-price auction. The inclusion of resale possibilities thus permits a general revenue ranking of the two auctions that is not available when these are excluded.

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Work Title Asymmetric Auctions with Resale
Access
Open Access
Creators
  1. Isa Hafalir
  2. Vijay Krishna
License CC BY-NC 4.0 (Attribution-NonCommercial)
Work Type Article
Publisher
  1. American Economic Review
Publication Date March 2008
Publisher Identifier (DOI)
  1. https://doi.org/10.1257/aer.98.1.87
Deposited March 02, 2022

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Version 1
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  • Created
  • Added Creator Isa Hafalir
  • Added Creator Vijay Krishna
  • Added Hafalir and Krishna AER (2008).pdf
  • Updated Publication Date, License Show Changes
    Publication Date
    • 2008
    License
    • https://www.gnu.org/licenses/gpl.html
  • Published
  • Updated
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Version 2
published

  • Created
  • Updated Publisher Show Changes
    Publisher
    • American Economic Review
  • Updated License Show Changes
    License
    • https://www.gnu.org/licenses/gpl.html
    • https://creativecommons.org/licenses/by-nc/4.0/
  • Published
  • Updated Publisher Identifier (DOI), Publication Date Show Changes
    Publisher Identifier (DOI)
    • https://doi.org/10.1257/aer.98.1.87
    Publication Date
    • 2008
    • 2008-03
  • Updated