Auctions for standard single indivisible goods are well understood. We consider auctioning goods with properties of shareability and externality where a bidder’s valuation consists of the strict value (i.e., sole ownership), sharing value and the externality in case of not possessing any units. We first study a static auction in which a set of equilibria are examined and expected revenues are compared. We also propose a two-stage auction model in which we disentangle the standard and resale auctions. Both first-and second-price auctions in stage one are investigated and the unique perfect Bayesian equilibrium is characterized. More importantly, the revenue equivalence holds in the two-stage auction for the initial seller. Finally, we compare the static auction with the two-stage auction and show that under certain conditions the initial seller obtains a higher expected revenue in the one-shot auction.
|Original language||English (US)|
|Number of pages||40|
|State||Published - 2012|