First-Price and Second-Price Auctions with Resale

Abstract

We add a resale stage to standard auctions with two bidders. Bids are either kept secret or made public. Either the auction winner or the auction loser chooses the resale price. We characterize an infinity of equilibria of the second-price auction and a unique equilibrium of the first-price auction. For every equilibrium of an auction without bid disclosure, we construct an outcome-equivalent and, in the case of the second-price auction, “posterior implementable” equilibrium of the auction with bid disclosure. We compare the revenues from the two auctions and from the two bargaining procedures at resaleAuctions, resale