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Title:The Impact of Resale on 2-Bidder First-Price Auctions where One Bidder?s Value is Commonly Known PDF Logo
Authors:Tröger, Thomas
Issue Date:2004
Series/Report no.:Bonn econ discussion papers 2004,25
Abstract:We consider 2-bidder first-price auctions where one bidder's value is commonly known. Such auctions induce an inefficient allocation. We show that a resale opportunity, where the auction winner can make a take-it-or-leave-it offer to the loser, increases (reduces) the inefficiency of the market when the buyer with the commonly known value is weak (strong). Resale always reduces all bidders' payoffs and increases the initial seller's revenue.
Subjects:asymmetric first-price auctions
resale
efficiency
JEL:D44
Document Type:Working Paper
Appears in Collections:Bonn Econ Discussion Papers, Bonn Graduate School of Economics (BGSE), Universität Bonn

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