Equilibrium and Welfare Analysis in Second-Price Auctions with Resale and Costly Entry
This study investigates the effects of resale allowance on entry strategies, seller’s expected revenue, and social welfare in a second-price auction with two-dimensional private information on values and participation costs. We characterize the perfect Bayesian equilibrium in cutoff strategies and i...
Saved in:
| Main Authors: | , , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Wiley
2022-01-01
|
| Series: | Discrete Dynamics in Nature and Society |
| Online Access: | http://dx.doi.org/10.1155/2022/9220681 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1832549709106905088 |
|---|---|
| author | Xiaoyong Cao Yunxia Yang Yuntao Yang Siru Li |
| author_facet | Xiaoyong Cao Yunxia Yang Yuntao Yang Siru Li |
| author_sort | Xiaoyong Cao |
| collection | DOAJ |
| description | This study investigates the effects of resale allowance on entry strategies, seller’s expected revenue, and social welfare in a second-price auction with two-dimensional private information on values and participation costs. We characterize the perfect Bayesian equilibrium in cutoff strategies and identify sufficient conditions under which the equilibrium is unique. Our analysis suggests that resale allowance leads the low-value bidder to become more aggressive on entry, while high-value bidder has a lower incentive to enter. Furthermore, the allowance of resale can increase the social welfare under a sufficient condition, and its effect on expected revenue is ambiguous. |
| format | Article |
| id | doaj-art-4267102a222f4d9ab605d77097eb47b6 |
| institution | Kabale University |
| issn | 1607-887X |
| language | English |
| publishDate | 2022-01-01 |
| publisher | Wiley |
| record_format | Article |
| series | Discrete Dynamics in Nature and Society |
| spelling | doaj-art-4267102a222f4d9ab605d77097eb47b62025-02-03T06:08:44ZengWileyDiscrete Dynamics in Nature and Society1607-887X2022-01-01202210.1155/2022/9220681Equilibrium and Welfare Analysis in Second-Price Auctions with Resale and Costly EntryXiaoyong Cao0Yunxia Yang1Yuntao Yang2Siru Li3School of International Trade and EconomicsSchool of International Trade and EconomicsChina Everbright BankSchool of International Trade and EconomicsThis study investigates the effects of resale allowance on entry strategies, seller’s expected revenue, and social welfare in a second-price auction with two-dimensional private information on values and participation costs. We characterize the perfect Bayesian equilibrium in cutoff strategies and identify sufficient conditions under which the equilibrium is unique. Our analysis suggests that resale allowance leads the low-value bidder to become more aggressive on entry, while high-value bidder has a lower incentive to enter. Furthermore, the allowance of resale can increase the social welfare under a sufficient condition, and its effect on expected revenue is ambiguous.http://dx.doi.org/10.1155/2022/9220681 |
| spellingShingle | Xiaoyong Cao Yunxia Yang Yuntao Yang Siru Li Equilibrium and Welfare Analysis in Second-Price Auctions with Resale and Costly Entry Discrete Dynamics in Nature and Society |
| title | Equilibrium and Welfare Analysis in Second-Price Auctions with Resale and Costly Entry |
| title_full | Equilibrium and Welfare Analysis in Second-Price Auctions with Resale and Costly Entry |
| title_fullStr | Equilibrium and Welfare Analysis in Second-Price Auctions with Resale and Costly Entry |
| title_full_unstemmed | Equilibrium and Welfare Analysis in Second-Price Auctions with Resale and Costly Entry |
| title_short | Equilibrium and Welfare Analysis in Second-Price Auctions with Resale and Costly Entry |
| title_sort | equilibrium and welfare analysis in second price auctions with resale and costly entry |
| url | http://dx.doi.org/10.1155/2022/9220681 |
| work_keys_str_mv | AT xiaoyongcao equilibriumandwelfareanalysisinsecondpriceauctionswithresaleandcostlyentry AT yunxiayang equilibriumandwelfareanalysisinsecondpriceauctionswithresaleandcostlyentry AT yuntaoyang equilibriumandwelfareanalysisinsecondpriceauctionswithresaleandcostlyentry AT siruli equilibriumandwelfareanalysisinsecondpriceauctionswithresaleandcostlyentry |