Auctions with entry and resale

We study how resale affects auctions with costly entry in a model where bidders possess two-dimensional private information signals: entry costs and valuations. We establish the existence of symmetric entry equilibrium and identify sufficient conditions under which the equilibrium is unique. Our analysis suggests that the opportunity of resale affects both entry and bidding, and, in particular, it induces motivation for speculative entry and resale hunting abstentions. Our numerical results suggest that while expected entry is higher when resale is allowed, the effects of resale on expected revenue and efficiency are both ambiguous. (c) 2013 Elsevier Inc. All rights reserved.