Resale in second-price auctions with costly participation
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Date
2017-09-01
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Journal Title
Journal ISSN
Volume Title
Publisher
International Journal of Industrial Organization
Abstract
Abstract We study sealed-bid second-price auctions with costly participation and resale. Each bidder chooses to participate in the auction if her valuation is higher than her optimally chosen participation cutoff. If resale is not allowed and the bidder valuations are drawn from a strictly convex distribution function, the symmetric equilibrium (where all bidders use the same cutoff) is less efficient than a class of two-cutoff asymmetric equilibria. Existence of these equilibria without resale is sufficient for existence of similarly constructed two-cutoff equilibria with resale. Moreover, the equilibria with resale are “more asymmetric” and (under a sufficient condition) more efficient than the corresponding equilibria without resale.
Description
Keywords
Second-price auctions, Resale, Participation cost, Endogenous entry, Endogenous valuations
Citation
Gorkem Celik, Okan Yilankaya, Resale in second-price auctions with costly participation, In International Journal of Industrial Organization, Volume 54, 2017, Pages 148-174