A BEJTE Contributions article.

Abstract

This paper characterizes a set of Nash equilibria in a first-price sealed-bid repeated auction with the right of first refusal using two bidders and asymmetric information regarding the bidders' value distributions. When contract value is constant from one auction to the next and winners' values are publicized, agents retain the value of incumbency and bids are identical to one-shot auctions. When each agent's contract values are random across auctions, agents choose to bid away the full expected value of incumbency, providing a measure of the value of information in this context.

Submitted: August 24, 2006 · Accepted: March 27, 2007 · Published: June 11, 2007

Recommended Citation

Chouinard, Hayley H. and Yoder, Jonathan K. (2007) "Repeated Auctions with the Right of First Refusal," The B.E. Journal of Theoretical Economics: Vol. 7 : Iss. 1 (Contributions), Article 21.
DOI: 10.2202/1935-1704.1332
Available at: http://www.bepress.com/bejte/vol7/iss1/art21