| Abstract: |
In the Italian Football League rights to a player’s performance could be
co-owned by two clubs for one year. Co-ownership must then be resolved and if
the clubs fail finding an agreement they are asked by the League to
participate to an auction, where each of them submits a price offer for the
missing half of the rights. The player offering the highest price obtains the
missing half of the rights paying that price to the opponent. In the paper we
characterize the auction equilibrium structure with both complete and
incomplete information. Due to its features, a main finding in such auction is
that “losers” can obtain a higher payoff than “winners”, and in this sense be
the real winners. Then, by considering the auction as a more general mechanism
for co-ownership resolution, we extend the model to any finite number of
players and argue how some of the results with two players do not necessarily
generalize. In particular, while with two players the equilibrium expected
payoffs can never be negative this may not be so with a higher number of
players. Finally, also with incomplete information the symmetric bidding
equilibrium function with any finite number of players is in the “winning
losers” spirit. Indeed, bids range between one’s value and twice of it, and
increase with the number of players since it becomes more likely that some
opponent will have a higher value. |