Sequential auctions of endogenously valued objects

Two completely informed but possibly asymmetric bidders buy or sell identical "claims" in sequential auctions. They subsequently receive monetary prizes that depend upon the final allocation of claims. Iterated elimination of weakly dominated strategies leaves a unique Nash equilibrium. For any prize schedule, prices weakly decline as the auctions progress, and points of strict decline have a simple characterization. For one class of prize schedules, which arises naturally if duopolists bid for a scarce input, the equilibrium is completely characterized; many initial allocations generate the same final (unequal) division of claims, which may be interpreted as the natural market structure. Journal of Economic Literature Classification Numbers: D43, D44, L11.