Affordable Access

Publisher Website

Auctions with private uncertainty and resale opportunities

Authors
Journal
Journal of Economic Theory
0022-0531
Publisher
Elsevier
Publication Date
Volume
108
Issue
1
Identifiers
DOI: 10.1016/s0022-0531(02)00010-8
Keywords
  • Auctions
  • Resale Markets
  • Endogenous Valuations
  • Signaling
  • Winner'S Curse
  • Loser'S Curse

Abstract

Abstract When an auction is followed by an opportunity for resale, bidder valuations are endogenously determined, reflecting anticipated profit from buying/selling in the resale market. These valuations vary with the resale market structure, can differ across auction types, and may be lower or higher than if resale were impossible. Although resale introduces a common value element to the model, revenue equivalence can hold; when it fails, this is due not to affiliation but to differences in information conveyed to the secondary market. Information linkages between markets can also lead to signaling and, in some cases, preclude separation in the auction.

There are no comments yet on this publication. Be the first to share your thoughts.