Speculation in Second-Price Auctions with Resale

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Speculation in Second-Price Auctions with Resale

Author Info

Rod Garratt (University of California, Santa Barbara)
Thomas Troger (University of California, Santa Barbara)

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Abstract

This paper contributes to the literature on second-price auctions with resale. We add speculators--bidders with value zero--to the standard symmetric independent private values environment. There always exists a continuum of inefficient equilibria that are profitable for a speculator. With no reserve price in the initial auction, specu-lation can enhance the initial seller's expected revenue. On the other hand, speculation can harm the initial seller even if she commits to an optimal reserve price. Our results are valid for English auctions as well.

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Publisher Info
Paper provided by Department of Economics, UC Santa Barbara in its series University of California at Santa Barbara, Economics Working Paper Series with number wp4-03.

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Date of creation: 28 Apr 2003
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Handle: RePEc:cdl:ucsbec:wp4-03

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Paper
- Rod Garratt & Thomas Troger, 2003. "Speculation in Second-Price Auctions with Resale," Game Theory and Information 0305003, EconWPA. [Downloadable!]
- Rod Garratt & Thomas Troger, 2003. "Speculation in Second-Price Auctions with Resale," Levine's Bibliography 506439000000000246, UCLA Department of Economics. [Downloadable!]

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

Paul Milgrom & Ilya Segal, 2002. "Envelope Theorems for Arbitrary Choice Sets," Econometrica, Econometric Society, vol. 70(2), pages 583-601, March. [Downloadable!] (restricted)
Lawrence M. Ausubel & Peter Cramton, 1998. "The Optimality of Being Efficient," Papers of Peter Cramton 98wpoe, University of Maryland, Department of Economics - Peter Cramton, revised 18 Jun 1999. [Downloadable!]
Edlin, Aaron S. & Shannon, Chris, 1998. "Strict Monotonicity in Comparative Statics," Journal of Economic Theory, Elsevier, vol. 81(1), pages 201-219, July. [Downloadable!] (restricted)
Other versions:
- Aaron S. Edlin and Chris Shannon., 1995. "Strict Monotonicity in Comparative Statics," Economics Working Papers 95-238, University of California at Berkeley. [Downloadable!]
repec:att:wimass:19199933 is not listed on IDEAS
Charles Zhoucheng Zheng, 2002. "Optimal Auction with Resale," Econometrica, Econometric Society, vol. 70(6), pages 2197-2224, November. [Downloadable!] (restricted)
Ken Binmore & Larry Samuelson, . "Evolutionary Drift and Equilibrium Selection," ELSE working papers 011, ESRC Centre on Economics Learning and Social Evolution. [Downloadable!]
Roger B. Myerson, 1978. "Optimal Auction Design," Discussion Papers 362, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
McAfee, R. Preston & Vincent, Daniel, 1997. "Sequentially Optimal Auctions," Games and Economic Behavior, Elsevier, vol. 18(2), pages 246-276, February. [Downloadable!] (restricted)
Other versions:
- R. Preston McAfee & Daniel Vincent, 1994. "Sequentially Optimal Auctions," Discussion Papers 1104, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
Haile, Philip A., 2000. "Partial Pooling at the Reserve Price in Auctions with Resale Opportunities," Games and Economic Behavior, Elsevier, vol. 33(2), pages 231-248, November. [Downloadable!] (restricted)
Haile, Philip A., 2003. "Auctions with private uncertainty and resale opportunities," Journal of Economic Theory, Elsevier, vol. 108(1), pages 72-110, January. [Downloadable!] (restricted)
Ken Binmore & Larry Samuelson, . "Evolutionary Drift And Equilibrium Selection," ELSE working papers 049, ESRC Centre on Economics Learning and Social Evolution.
Jehiel, Philippe & Moldovanu, Benny, 1999. "Resale Markets and the Assignment of Property Rights," Review of Economic Studies, Blackwell Publishing, vol. 66(4), pages 971-91, October. [Downloadable!] (restricted)
Other versions:
- Jehiel, Phillipe & Moldovanu, Benny, 1997. "Resale Markets and the Assignment of Property Rights," Sonderforschungsbereich 504 Publications 97-05, Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim.
- Jehiel, Philippe & Moldovanu, Benny, 1995. "Resale Markets and the Assignment of Property Rights," CEPR Discussion Papers 1196, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Giacomo Calzolari & Alessandro Pavan, 2005. "Monopoly with Resale," Discussion Papers 1405, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
Other versions:
- Giacomo Calzolari & Alessandro Pavan, 2004. "Monopoly with Resale," Discussion Papers 1393, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
- Giacomo Calzolari & Alessandro Pavan, 2003. "Monopoly with Resale," Working Papers 2003.20, Fondazione Eni Enrico Mattei. [Downloadable!]
- Giacomo Calzolari & Alessandro Pavan, 2006. "Monopoly with Resale," RAND Journal of Economics, The RAND Corporation, vol. 37(2), pages 362-375, Summer.

Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Thomas Troger, 2003. "Speculation in First-Price Auctions with Resale," Microeconomics 0308001, EconWPA. [Downloadable!]
Rod Garratt & Thomas Troger, 2004. "Speculation in Standard Auctions with Resale," Microeconomics 0405005, EconWPA. [Downloadable!]
Other versions:
- Rod Garrat & Thomas Tröger, 2005. "Speculation in Standard Auctions with Resale," Bonn Econ Discussion Papers bgse10_2005, University of Bonn, Germany. [Downloadable!]
- Rod Garratt & Thomas Tröger, 2005. "Speculation in Standard Auctions with Resale," Discussion Papers 42, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich. [Downloadable!]
- Rod Garratt & Thomas Tröger, 2006. "Speculation in Standard Auctions with Resale," Econometrica, Econometric Society, vol. 74(3), pages 753-769, 05. [Downloadable!] (restricted)
Marco Pagnozzi, 2004. "Bidding to Lose? Auctions with Resale," CSEF Working Papers 116, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy. [Downloadable!]

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