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Zheng, Charles Z.
Year of Publication: 
Series/Report no.: 
EPRI Working Paper 2014-1
Existence of a monotone pure-strategy perfect Bayesian equilibrium is proved for a multistage game of first-price auctions with interbidder resale, with any finite number of ex ante different bidders. Endogenous gains at resale complicate the winner's curse and upset previous fixed-point methods to prove existence of monotone equilibria. This paper restructures the fixed-point approach with respect to comparative statics of the resale mechanisms strategically chosen after the auction. Despite speculation possibilities and the discontinuity-inducing uniform tie-breaking rule, at our equilibrium any bid that stands a chance to win is strictly increasing in the bidder's use value.
Document Type: 
Working Paper

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