Resale in second-price auctions with costly participation

Gorkem Celik, Okan Yilankaya

Research output: Contribution to journal › Article

Abstract

We study sealed-bid second-price auctions with costly participation and resale. Each bidder chooses to participate in the auction if her valuation is higher than her optimally chosen participation cutoff. If resale is not allowed and the bidder valuations are drawn from a strictly convex distribution function, the symmetric equilibrium (where all bidders use the same cutoff) is less efficient than a class of two-cutoff asymmetric equilibria. Existence of these equilibria without resale is sufficient for existence of similarly constructed two-cutoff equilibria with resale. Moreover, the equilibria with resale are “more asymmetric” and (under a sufficient condition) more efficient than the corresponding equilibria without resale.
Original languageEnglish
Pages (from-to)148-174
Number of pages27
JournalInternational Journal of Industrial Organization
Volume54
DOIs
Publication statusPublished - Sep 1 2017

Fingerprint

Distribution functions
Participation
Second-price auction
Resale

Keywords

  • Endogenous entry
  • Endogenous valuations
  • Participation cost
  • Resale
  • Second-price auctions

Cite this

Resale in second-price auctions with costly participation. / Celik, Gorkem; Yilankaya, Okan.

In: International Journal of Industrial Organization, Vol. 54, 01.09.2017, p. 148-174.

Research output: Contribution to journal › Article

Celik, G & Yilankaya, O 2017, 'Resale in second-price auctions with costly participation' International Journal of Industrial Organization, vol. 54, pp. 148-174. https://doi.org/10.1016/j.ijindorg.2017.06.009
Celik G, Yilankaya O. Resale in second-price auctions with costly participation. International Journal of Industrial Organization. 2017 Sep 1;54:148-174. https://doi.org/10.1016/j.ijindorg.2017.06.009
Celik, Gorkem ; Yilankaya, Okan. / Resale in second-price auctions with costly participation. In: International Journal of Industrial Organization. 2017 ; Vol. 54. pp. 148-174.
@article{2a955ddbad6d47e28f66885d97767c20,
title = "Resale in second-price auctions with costly participation",
abstract = "We study sealed-bid second-price auctions with costly participation and resale. Each bidder chooses to participate in the auction if her valuation is higher than her optimally chosen participation cutoff. If resale is not allowed and the bidder valuations are drawn from a strictly convex distribution function, the symmetric equilibrium (where all bidders use the same cutoff) is less efficient than a class of two-cutoff asymmetric equilibria. Existence of these equilibria without resale is sufficient for existence of similarly constructed two-cutoff equilibria with resale. Moreover, the equilibria with resale are “more asymmetric” and (under a sufficient condition) more efficient than the corresponding equilibria without resale.",
keywords = "Endogenous entry, Endogenous valuations, Participation cost, Resale, Second-price auctions",
author = "Gorkem Celik and Okan Yilankaya",
year = "2017",
month = "9",
day = "1",
doi = "10.1016/j.ijindorg.2017.06.009",
language = "English",
volume = "54",
pages = "148--174",
journal = "International Journal of Industrial Organization",
issn = "0167-7187",
publisher = "Elsevier",

}

TY - JOUR

T1 - Resale in second-price auctions with costly participation

AU - Celik, Gorkem

AU - Yilankaya, Okan

PY - 2017/9/1

Y1 - 2017/9/1

N2 - We study sealed-bid second-price auctions with costly participation and resale. Each bidder chooses to participate in the auction if her valuation is higher than her optimally chosen participation cutoff. If resale is not allowed and the bidder valuations are drawn from a strictly convex distribution function, the symmetric equilibrium (where all bidders use the same cutoff) is less efficient than a class of two-cutoff asymmetric equilibria. Existence of these equilibria without resale is sufficient for existence of similarly constructed two-cutoff equilibria with resale. Moreover, the equilibria with resale are “more asymmetric” and (under a sufficient condition) more efficient than the corresponding equilibria without resale.

AB - We study sealed-bid second-price auctions with costly participation and resale. Each bidder chooses to participate in the auction if her valuation is higher than her optimally chosen participation cutoff. If resale is not allowed and the bidder valuations are drawn from a strictly convex distribution function, the symmetric equilibrium (where all bidders use the same cutoff) is less efficient than a class of two-cutoff asymmetric equilibria. Existence of these equilibria without resale is sufficient for existence of similarly constructed two-cutoff equilibria with resale. Moreover, the equilibria with resale are “more asymmetric” and (under a sufficient condition) more efficient than the corresponding equilibria without resale.

KW - Endogenous entry

KW - Endogenous valuations

KW - Participation cost

KW - Resale

KW - Second-price auctions

U2 - 10.1016/j.ijindorg.2017.06.009

DO - 10.1016/j.ijindorg.2017.06.009

M3 - Article

VL - 54

SP - 148

EP - 174

JO - International Journal of Industrial Organization

JF - International Journal of Industrial Organization

SN - 0167-7187

ER -

Access to Document