Collaborative Research: Auctions and Resale Markets

点击翻译按钮获取中文摘要

Auctions have been widely used in recent years as a way to effectively privatize social assets. Some prominent examples of such assets are oil and gas rights, timber rights and rights to use the electromagnetic spectrum. The practical use of auctions has, in turn, led to substantial developments in the theoretical and empirical analysis of auctions. In most real-world auctions bidders anticipate the resale possibilities, either among themselves or to a larger market. The presence of resale markets affects both bidding behavior and the performance of auctions. With a few exceptions, however, the bulk of the theoretical and empirical work on auctions to date has neglected the issue of resale markets. This project explores two major questions. First, given that resale possibilities exist, how do different auction formats perform in terms of revenue and economic efficiency? In particular, is one format preferable to another in the presence of resale? Second, how do resale possibilities affect bidding behavior in auctions and how do these possibilities affect the performance of a given auction format, both in terms of efficiency and in terms of the revenue? For instance, is resale advantageous to a seller, say a government, or should resale be discouraged or even banned?Preliminary research on the first question shows that if a single object is being sold and resale is possible, then first-price sealed-bid auctions are superior in terms of revenue to open ascending auctions. This theoretical finding holds in situations in which bidders are asymmetric, an environment in which, absent resale, no general ranking of the two formats is available. From a methodological perspective, therefore, resale considerations make the analysis of asymmetric auctions---an area where general results are few---more tractable. The main objective of the first part of the project is to explore the extent to which this finding extends to other environments---more bidders, multiple objects and different information structures.The second part of the project asks, in effect, whether resale restrictions---which, for instance, have been imposed by the FCC and other bodies---are beneficial from either a revenue or efficiency perspective. Preliminary research, again for asymmetric first-price auctions, suggests that resale actually increases revenues. Whether or not it increases social surplus, however, seems to depend on the degree of asymmetry. The main objective of this part of the project is to study the generality and robustness of these findings.