Resale in Auctions with Financial Constraints
Data(s) |
08/10/2012
08/10/2012
2012
|
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Resumo |
This paper analyzes auctions where bidders face nancial constraints that may force them to resell part of the property of the good (or subcontract part of a project) at a resale market. First we show that the ine¢ cient speculative equilibria of second- price auctions (Garratt and Tröger, 2006) generalizes to situations with partial resale where only the high value bidder is nancially constrained. However, when all players face nancial constraints the ine¢ cient speculative equilibria disappear. Therefore, for auctioning big facilities or contracts where all bidders are nancially constrained and there is a resale market, the second price auction remains a simple and appropriate mechanism to achieve an e¢ cient allocation. |
Identificador |
1988-088X |
Idioma(s) |
eng |
Publicador |
University of the Basque Country, Department of Foundations of Economic Analysis II |
Relação |
DFAEII 2012.03 |
Direitos |
info:eu-repo/semantics/openAccess |
Palavras-Chave | #auctions #resale #financial constraints #subcontracting |
Tipo |
info:eu-repo/semantics/workingPaper |