Discriminatory price auctions with resale and optimal quantity caps

Artikel

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Theoretical Economics ; ISSN: 1555-7561 ; Volume: 15 ; Year: 2020 ; Issue: 1 ; Pages: 1-28 ; New Haven, CT: The Econometric Society

Classification and Topics

• Classification: Wirtschaft ; Market Structure, Pricing, and Design: Monopoly ; Auctions ; Market Design ; Asymmetric and Private Information; Mechanism Design
• Subject: Multi-unit auctions ; resale ; quantity caps

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Baisa, Brian ; Burkett, Justin
• Event: Veröffentlichung
• (who): The Econometric Society
• (where): New Haven, CT
• (when): 2020

Further information

• DOI: doi:10.3982/TE2939
• Handle: http://hdl.handle.net/10419/217083
• Last update: 10.03.2025, 11:43 AM CET