All-Pay Auctions with Private Values and Resale

This paper studies all-pay auctions with resale opportunities in a model with independent private values. Given the existence of a resale market, the primary players will compete more aggressively over an indivisible prize. We characterize a symmetric equilibrium for all-pay auctions with private values and resale and derive a revenue-ranking result for all-pay auctions with and without resale opportunities. From the point of view of the initial seller, the expected revenue resulting from an all-pay auction with all potential buyers is the same as that from an all-pay auction with separate markets and resale possibilities, if the first-stage winner cannot commit to a reserve price above her true valuation. The initial seller never gains and may lose in terms of expected revenue when the reseller can optimally set a reserve price.