American Economic Review: Vol. 98 No. 1 (March 2008)


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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


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)

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Hafalir, Isa (Carnegie Mellon U)
Krishna, Vijay (PA State U)

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D44: Auctions

American Economic Review

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