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Auctions with entry and resale

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  • Xu, Xiaoshu
  • Levin, Dan
  • Ye, Lixin

Abstract

We study how resale affects auctions with costly entry in a model where bidders possess two-dimensional private information signals: entry costs and valuations. We establish the existence of symmetric entry equilibrium and identify sufficient conditions under which the equilibrium is unique. Our analysis suggests that the opportunity of resale affects both entry and bidding, and, in particular, it induces motivation for speculative entry and resale hunting abstentions. Our numerical results suggest that while expected entry is higher when resale is allowed, the effects of resale on expected revenue and efficiency are both ambiguous.

Suggested Citation

  • Xu, Xiaoshu & Levin, Dan & Ye, Lixin, 2013. "Auctions with entry and resale," Games and Economic Behavior, Elsevier, vol. 79(C), pages 92-105.
    • Handle: RePEc:eee:gamebe:v:79:y:2013:i:c:p:92-105
    DOI: 10.1016/j.geb.2013.01.006
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    Citations

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    Cited by:

    1. Loertscher, Simon & Marx, Leslie M., 2017. "Auctions with bid credits and resale," International Journal of Industrial Organization, Elsevier, vol. 55(C), pages 58-90.
    2. Kaplan, Todd R. & Zamir, Shmuel, 2015. "Advances in Auctions," Handbook of Game Theory with Economic Applications,, Elsevier.
    3. Celik, Gorkem & Yilankaya, Okan, 2017. "Resale in second-price auctions with costly participation," International Journal of Industrial Organization, Elsevier, vol. 54(C), pages 148-174.
    4. Marco Pagnozzi & Krista J. Saral, 2019. "Entry by successful speculators in auctions with resale," Experimental Economics, Springer;Economic Science Association, vol. 22(2), pages 477-505, June.
    5. Gentry, Matthew & Li, Tong & Lu, Jingfeng, 2017. "Auctions with selective entry," Games and Economic Behavior, Elsevier, vol. 105(C), pages 104-111.
    6. Lorentziadis, Panos L., 2016. "Optimal bidding in auctions from a game theory perspective," European Journal of Operational Research, Elsevier, vol. 248(2), pages 347-371.
    7. Xiaoyong Cao & Guofu Tan & Guoqiang Tian & Okan Yilankaya, 2018. "Equilibria in second-price auctions with private participation costs," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 65(2), pages 231-249, March.
    8. Akyol, Ethem, 2019. "Effects of resale in second-price auctions with private participation costs," Mathematical Social Sciences, Elsevier, vol. 101(C), pages 6-19.
    9. Isa Hafalir & Musab Kurnaz, 2019. "Discriminatory auctions with resale," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 7(2), pages 173-189, December.
    10. Robert G. Hammond & Thayer Morrill, 2014. "Strategic Exclusion Of The Highest-Valued Bidders In Wholesale Automobile Auctions," Economic Inquiry, Western Economic Association International, vol. 52(3), pages 1219-1230, July.
    11. Akyol, Ethem, 2021. "Can resale harm the original seller in a second-price auction?," Economics Letters, Elsevier, vol. 203(C).

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    More about this item

    Keywords

    Auctions; Auctions with resale; Auctions with entry;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General

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