Before revision:  The resulting resale option guarantees that the equilibrium price exceeds the price of the asset in a static buy-and-hold model where speculation is ruled out . Our model features three main novelties. First, increasing marginal costs entail that the price depends on the exogenous supply.
After revision:  The resulting resale option guarantees that the equilibrium price exceeds the price of the asset in a static buy-and-hold model where speculation is ruled out ; the difference is identified as a bubble. In our model increasing marginal costs entail that the price depends on the exogenous supply.