Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/108666 
Year of Publication: 
2015
Series/Report no.: 
Working Paper No. 1501
Publisher: 
Koç University-TÜSİAD Economic Research Forum (ERF), Istanbul
Abstract: 
We investigate efficiency properties of sealed-bid second-price auctions with costly participation and resale. Each bidder chooses to participate in the auction if her valuation is higher than her optimally chosen participation cutoff. If resale is not allowed and the bidder valuations are drawn from a strictly convex distribution function, the symmetric equilibrium (where all bidders use the same cutoff) is less efficient than a class of two-cutoff asymmetric equilibria. Existence of these equilibria without resale is sufficient for existence of similarly constructed two-cutoff equilibria with resale. Moreover, these equilibria with resale are ?more asymmetric? and (under a sufficient condition) more efficient than the corresponding equilibria without resale.
Subjects: 
Second-price auctions
resale
participation cost
endogenous entry
endogenous valuations
JEL: 
C72
D44
D82
Document Type: 
Working Paper

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