Resale and Bundling in Auctions

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: Allowing resale in multi-object auctions increases bidders. incentives to jointly reduce demand, because resale increases low-value bidders’ willingness to pay and reduces high-value bidders’ willingness to pay. Therefore (unlike in single-object auctions), resale may reduce the seller’s revenue in multi-object auctions. However, we show that, under reasonable conditions, allowing resale and bundling the objects on sale are “complement strategies” for the seller – by bundling and allowing resale the seller earns a higher revenue than by selling the objects separately and/or not allowing resale. We also analyze how resale affects a bidder’s incentive to unilaterally reduce demand, and we show why allowing resale may reduce efficiency.

Keywords: multi-object auctions; resale; bundling; demand reduction (search for similar items in EconPapers)
JEL-codes: D44 (search for similar items in EconPapers)
Date: 2007-11-01
New Economics Papers: this item is included in nep-com, nep-gth and nep-mic
References: Add references at CitEc
Citations:

Published in International Journal of Industrial Organization, 27(6), 667-678, 2009

Downloads: (external link)
http://www.csef.it/WP/wp186.pdf (application/pdf)

Related works:
Journal Article: Resale and bundling in auctions (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sef:csefwp:186

Access Statistics for this paper

More papers in CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy Contact information at EDIRC.
Bibliographic data for series maintained by Dr. Maria Carannante ().