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  3. American Economic Review
  4. March 2008
  5. Asymmetric Auctions with Resale

American Economic Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

Asymmetric Auctions with Resale

  • Isa Hafalir
  • Vijay Krishna
American Economic Review
vol. 98, no. 1, March 2008
(pp. 87–112)
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Abstract

We study first- and second-price auctions with resale in a model with independent private values. With asymmetric bidders, the resulting ineffi ciencies 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. (JEL D44)

Citation

Hafalir, Isa, and Vijay Krishna. 2008. "Asymmetric Auctions with Resale." American Economic Review, 98 (1): 87–112. DOI: 10.1257/aer.98.1.87

Additional Materials

JEL Classification

  • D44 Auctions