Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5078238 | International Journal of Industrial Organization | 2009 | 12 Pages |
Abstract
The possibility of resale increases bidders' incentives to jointly reduce demand in multi-object auctions, because resale increases low-value bidders' willingness to pay and reduces high-value bidders' willingness to pay. Therefore, resale may reduce the seller's revenue. In a simple model with complete information, however, allowing resale and bundling the objects on sale are “complement strategies” for the seller (under reasonable conditions)-by bundling and allowing resale the seller earns a higher revenue than by selling the objects separately and/or forbidding resale. We also show why allowing resale may reduce efficiency.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Marco Pagnozzi,