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American Economic Review: Vol. 98 No. 1 (March 2008)
AER Volume. 98, Issue 1 | 
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Asymmetric Auctions with Resale
Article Citation
Hafalir, Isa, and
Vijay Krishna. 2008. "Asymmetric Auctions with Resale."
American Economic Review,
98(1): 87-112.
DOI: 10.1257/aer.98.1.87
DOI: 10.1257/aer.98.1.87
Abstract
We study first- and second-price auctions with resale in a model with independent
private values. With asymmetric bidders, the resulting ineffi ciencies create
a motive for post-auction trade which, in our model, takes place via monopoly
pricing—the winner makes a take-it-or-leave-it offer to the loser. We show (a)
a first-price auction with resale has a unique monotonic equilibrium; and (b)
with resale, the expected revenue from a first-price auction exceeds that from a
second-price auction. The inclusion of resale possibilities thus permits a general
revenue ranking of the two auctions that is not available when these are
excluded. (JEL D44)
Article Full-Text Access
Full-text Article
Additional Materials
Link to Appendix (149.24 KB)
Authors
Hafalir, Isa (Carnegie Mellon U)
Krishna, Vijay (PA State U)
Krishna, Vijay (PA State U)
JEL Classifications
D44: Auctions
