This paper studies a model of simultaneous sealed-bid multiobject auctions where the designated winner has the possibility of withdrawing his bid. It is shown that, when the bidders face rising marginal costs (a capacity constraint), the introduction of such a withdrawal option may lead to lower equilibrium prices. Furthermore, an increase in the slope of the marginal cost curve may lead to lower equilibrium prices. Copyright 1991 by The London School of Economics and Political Science.