Second Price Auctions with Resale Under State Uncertainty

Download or read book Second Price Auctions with Resale Under State Uncertainty written by Mehmet Oğuz Karahan and published by . This book was released on 2015 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study the equilibrium of second-price auctions with resale when the value of the asset is subject to future state uncertainty. We assume bidders differ in their sensitivities toward each state, resulting in alternating orderings of use values. In both complete and incomplete information settings, equilibrium bids are higher than expected use values, equilibrium bidding functions are non-monotone and convex, with a minimum at the median of type distribution. Under incomplete information, the winner of the auction is unable to infer the type of losing bidder with certainty, which can result in scenarios where she cannot capture all surplus.