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Auctions with resale at a later date

Author

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  • Sanyyam Khurana

    (TERI School of Advanced Studies)

Abstract

In this paper, we consider fixed time delays in auctions with resale. The time delay may impact the bidders’ valuations of the object. In particular, the auction’s winner may obtain some value by depleting the object, either by consuming it or exploiting it, over the interim period and the loser may lose some value by virtue of the object being depleted by the winner. Our main result is that fixed time delays lead to asymmetric bid distributions. For a special family of probability distributions, we show that the first-price auction is revenue superior to the second-price auction.

Suggested Citation

  • Sanyyam Khurana, 2024. "Auctions with resale at a later date," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 78(3), pages 843-875, November.
    • Handle: RePEc:spr:joecth:v:78:y:2024:i:3:d:10.1007_s00199-024-01577-6
    DOI: 10.1007/s00199-024-01577-6
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    References listed on IDEAS

    as
    1. Cheng, Harrison, 2011. "Auctions with resale and bargaining power," Journal of Mathematical Economics, Elsevier, vol. 47(3), pages 300-308.
    2. Gábor Virág, 2013. "First-price auctions with resale: the case of many bidders," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 52(1), pages 129-163, January.
    3. Hafalir, Isa & Krishna, Vijay, 2009. "Revenue and efficiency effects of resale in first-price auctions," Journal of Mathematical Economics, Elsevier, vol. 45(9-10), pages 589-602, September.
    4. Isa Hafalir & Vijay Krishna, 2008. "Asymmetric Auctions with Resale," American Economic Review, American Economic Association, vol. 98(1), pages 87-112, March.
    5. Sanyyam Khurana, 2024. "Unraveling of value-rankings in auctions with resale," Review of Economic Design, Springer;Society for Economic Design, vol. 28(2), pages 455-483, June.
    6. Bernard Lebrun, 2015. "Revenue-superior variants of the second-price auction," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 59(2), pages 245-275, June.
    7. Virág, Gábor, 2016. "Auctions with resale: Reserve prices and revenues," Games and Economic Behavior, Elsevier, vol. 99(C), pages 239-249.
    8. Rod Garratt & Thomas Tröger, 2006. "Speculation in Standard Auctions with Resale," Econometrica, Econometric Society, vol. 74(3), pages 753-769, May.
    9. Lebrun, Bernard, 2012. "Optimality and the English and second-price auctions with resale," Games and Economic Behavior, Elsevier, vol. 75(2), pages 731-751.
    10. Todd Kaplan & Shmuel Zamir, 2012. "Asymmetric first-price auctions with uniform distributions: analytic solutions to the general case," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 50(2), pages 269-302, June.
    11. Xiaogang Che & Tilman Klumpp, 2023. "Auctions versus sequential mechanisms when resale is allowed," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 75(4), pages 1207-1245, May.
    12. Sanyyam Khurana, 2022. "Auctions with resale and risk aversion," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 10(1), pages 117-128, May.
    13. Tymofiy Mylovanov & Thomas Tröger, 2009. "Optimal auction with resale—a characterization of the conditions," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 40(3), pages 509-528, September.
    14. Harrison Cheng & Guofu Tan, 2010. "Asymmetric common-value auctions with applications to private-value auctions with resale," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 45(1), pages 253-290, October.
    15. Lebrun, Bernard, 1999. "First Price Auctions in the Asymmetric N Bidder Case," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(1), pages 125-142, February.
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    More about this item

    Keywords

    Resale; Later date; Time delay; Asymmetry;
    All these keywords.

    JEL classification:

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

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