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Multi-object auctions with resale: Theory and experiment

Author

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  • Filiz-Ozbay, Emel
  • Lopez-Vargas, Kristian
  • Ozbay, Erkut Y.
Abstract
We study multi-object auctions in the presence of post-auction trade opportunities among bidders who have either single- or multi-object demand. We focus on two formats: Vickrey auctions where package bidding is possible and simultaneous second-price auctions. We show that, under complementarities, the Vickrey format has an equilibrium where the objects are allocated efficiently at the auction stage whether resale markets are present or not. The simultaneous second-price, on the other hand, leads to inefficiency with or without resale possibility. Our experimental findings show that the possibility of resale in second-price auctions decreases the efficiency rate at the auction stage compared to the no resale case. However, after resale, the efficiency rate in second-price is as high as that of Vickrey auction without resale outcomes in the experiment. Preventing resale neither benefits nor hurts auction revenues in a second-price format.

Suggested Citation

  • Filiz-Ozbay, Emel & Lopez-Vargas, Kristian & Ozbay, Erkut Y., 2015. "Multi-object auctions with resale: Theory and experiment," Games and Economic Behavior, Elsevier, vol. 89(C), pages 1-16.
    • Handle: RePEc:eee:gamebe:v:89:y:2015:i:c:p:1-16
    DOI: 10.1016/j.geb.2014.10.008
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    Cited by:

    1. Isa Hafalir & Musab Kurnaz, 2019. "Discriminatory auctions with resale," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 7(2), pages 173-189, December.
    2. Marco Pagnozzi & Krista Jabs Saral, 2013. "Multi-Object Auctions with Resale: An Experimental Analysis," CSEF Working Papers 328, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    3. Karl H.Schlag, 2015. "Who gives Direction to Statistical Testing? Best Practice meets Mathematically Correct Tests," Vienna Economics Papers vie1512, University of Vienna, Department of Economics.
    4. Karl H.Schlag, 2015. "Who gives Direction to Statistical Testing? Best Practice meets Mathematically Correct Tests," Vienna Economics Papers 1512, University of Vienna, Department of Economics.
    5. Pagnozzi, Marco & Saral, Krista J., 2019. "Efficiency in auctions with (failed) resale," Journal of Economic Behavior & Organization, Elsevier, vol. 159(C), pages 254-273.
    6. Hikmet Gunay & Ricardo Huamán-Aguilar, 2024. "Experiments on the Different Numbers of Bidders in Sequential Auctions," Documentos de Trabajo / Working Papers 2024-530, Departamento de Economía - Pontificia Universidad Católica del Perú.
    7. Marco Pagnozzi & Krista J. Saral, 2019. "Entry by successful speculators in auctions with resale," Experimental Economics, Springer;Economic Science Association, vol. 22(2), pages 477-505, June.
    8. Wanchang Zhang, 2022. "Auctioning Multiple Goods without Priors," Papers 2204.13726, arXiv.org.
    9. Nicholas C. Bedard & Jacob K. Goeree & Philippos Louis & Jingjing Zhang, 2024. "Sealed-bid versus ascending spectrum auctions," Experimental Economics, Springer;Economic Science Association, vol. 27(2), pages 299-324, April.
    10. Miguel A. Fonseca & Francesco Giovannoni & Miltiadis Makris, 2020. "Auctions with external incentives: experimental evidence," International Journal of Game Theory, Springer;Game Theory Society, vol. 49(4), pages 1003-1043, December.
    11. Marco Pagnozzi & Krista J. Saral, 2015. "Demand Reduction in Multi-Object Auctions with Resale: An Experimental Analysis," CSEF Working Papers 416, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.

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    More about this item

    Keywords

    Multi-object auctions; Vickrey; Second-price; Package; Resale;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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