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The economics of contingent re-auctions

Publication ,  Journal Article
Brusco, S; Lopomo, G; Marx, LM
Published in: American Economic Journal: Microeconomics
May 1, 2011

We consider an auction environment where an object can be sold with usage restrictions that generate benefits to the seller but decrease buyers' valuations. In this environment, sellers such as the FCC have used "contingent re-auctions,"offering the restricted object with a reserve price, but re-auctioning it without restrictions if the reserve is not met. We show that contingent re-auctions are generally neither efficient nor optimal for the seller. We propose an alternative "exclusive-buyer mechanism"that can implement the efficient outcome in dominant strategies. In certain environments, parameters can be chosen so the seller's surplus is maximized across all selling procedures.

Duke Scholars

Published In

American Economic Journal: Microeconomics

DOI

EISSN

1945-7685

ISSN

1945-7669

Publication Date

May 1, 2011

Volume

3

Issue

2

Start / End Page

165 / 193

Related Subject Headings

  • 3803 Economic theory
  • 3801 Applied economics
  • 3502 Banking, finance and investment
  • 14 Economics
 

Citation

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ICMJE
MLA
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Brusco, S., Lopomo, G., & Marx, L. M. (2011). The economics of contingent re-auctions. American Economic Journal: Microeconomics, 3(2), 165–193. https://doi.org/10.1257/mic.3.2.165
Brusco, S., G. Lopomo, and L. M. Marx. “The economics of contingent re-auctions.” American Economic Journal: Microeconomics 3, no. 2 (May 1, 2011): 165–93. https://doi.org/10.1257/mic.3.2.165.
Brusco S, Lopomo G, Marx LM. The economics of contingent re-auctions. American Economic Journal: Microeconomics. 2011 May 1;3(2):165–93.
Brusco, S., et al. “The economics of contingent re-auctions.” American Economic Journal: Microeconomics, vol. 3, no. 2, May 2011, pp. 165–93. Scopus, doi:10.1257/mic.3.2.165.
Brusco S, Lopomo G, Marx LM. The economics of contingent re-auctions. American Economic Journal: Microeconomics. 2011 May 1;3(2):165–193.

Published In

American Economic Journal: Microeconomics

DOI

EISSN

1945-7685

ISSN

1945-7669

Publication Date

May 1, 2011

Volume

3

Issue

2

Start / End Page

165 / 193

Related Subject Headings

  • 3803 Economic theory
  • 3801 Applied economics
  • 3502 Banking, finance and investment
  • 14 Economics