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Title:Monopoly with resale PDF Logo
Authors:Calzolari, Giacomo
Pavan, Alessandro
Issue Date:2006
Series/Report no.:Discussion paper // Center for Mathematical Studies in Economics and Management Science 1405
Abstract:This paper examines the intricacies associated with the design of revenue-maximizing mechanisms for a monopolist who expects her buyers to resell. We consider two cases: resale to a third party who does not participate in the primary market and inter-bidder resale, where the winner resells to the losers. To influence the resale outcome, the monopolist must design an allocation rule and a disclosure policy that optimally fashion the beliefs of the participants in the secondary market. Our results show that the revenue-maximizing mechanism may require a stochastic selling procedure and a disclosure policy richer than the simple announcement of the decision to trade.
Subjects:information linkage between primary and secondary markets
optimal disclosure policy
stochastic allocations
mechanism design.
JEL:D44
D82
Document Type:Working Paper
Appears in Collections:Discussion Papers, Kellogg School of Management, Northwestern University

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