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Demand Reduction in Multi-object Auctions with Resale: An Experimental Analysis


  • We thank Ciro Avitabile, Vincent Crawford, Georgia Kosmopoulou, Dan Levin, Nicola Persico, Tim Salmon, Anastasia Semykina, the editor and the referees for extremely helpful comments, as well as seminar participants at the universities of Cambridge, Padova, Verona and Milan Bicocca, the ASFEE Conference, the ESA conferences in Chicago, Luxembourg, and Zurich, the CSEF-IGIER Symposium on Economics and Institutions, the 2nd EIEF-UNIBO Workshop on Industrial Organization, the NERI Workshop, the Workshop on Economics of Conflict and Cooperation in Bergamo, the Swiss IO Day, and the Brazilian Conference Series on Public Procurement. We also thank Svetlana Pevnitskaya and members of the xs/fs group for use of the laboratory at Florida State University, and Webster University Geneva for funding this project.


We analyse the effects of different resale mechanisms on bidders’ strategies in multi-object uniform-price auctions with asymmetric bidders. Our experiment consists of four treatments: one without resale and three resale treatments that vary the information available and the bargaining mechanism in the resale market. Resale markets induce demand reduction by high-value bidders and speculation by low-value bidders, thus affecting the allocation of the objects on sale. The magnitude of these effects, however, depends on the structure of the resale market. Features of the resale market that tend to increase its efficiency result in lower auction efficiency and seller's revenue.