Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/22902
Authors: 
Tröger, Thomas
Year of Publication: 
2004
Series/Report no.: 
Bonn Econ Discussion Papers No. 25/2004
Publisher: 
University of Bonn, Bonn Graduate School of Economics (BGSE), Bonn
Abstract: 
We consider 2-bidder first-price auctions where one bidder's value is commonly known. Such auctions induce an ineffcient 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 ineffciency 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

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