Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/217083 
Year of Publication: 
2020
Citation: 
[Journal:] Theoretical Economics [ISSN:] 1555-7561 [Volume:] 15 [Issue:] 1 [Publisher:] The Econometric Society [Place:] New Haven, CT [Year:] 2020 [Pages:] 1-28
Publisher: 
The Econometric Society, New Haven, CT
Abstract: 
We present a model of a discriminatory price auction in which a large bidder competes against many small bidders, followed by a post-auction resale stage in which the large bidder is endogenously determined to be a buyer or a seller. We extend results on first-price auctions with resale to this setting and use these results to give a tractable characterization of equilibrium behavior. We use this characterization to study the policy of capping the amount that may be won by large bidders in the auction, a policy that has received little attention in the auction literature. Our analysis shows that the trade-offs involved when adjusting these quantity caps can be understood in terms familiar to students of asymmetric first-price single-unit auctions. Furthermore, whether one seeks to maximize welfare or revenue can have contradictory implications for the choice of cap.
Subjects: 
Multi-unit auctions
resale
quantity caps
JEL: 
D42
D44
D47
D82
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article

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