We approach the biexciton Schrödinger equation not through the free-carrier basis as usually done, but through the free-exciton basis, exciton-exciton interactions being treated according to the recently developed composite boson many-body formalism which allows an exact handling of carrier exchange between excitons, as induced by the Pauli exclusion principle. We numerically solve the resulting biexciton Schrödinger equation with the exciton levels restricted to the ground state and we derive the biexciton ground state as well as the bound and unbound excited states as a function of hole-to-electron mass ratio. The biexciton ground-state energy we find, agrees reasonably well with variational results. Next, we use the obtained biexciton wave functions to calculate optical absorption in the presence of a dilute exciton gas in quantum well. We find a small asymmetric peak with a characteristic low-energy tail, identified with the biexciton ground state, and a set of large peaks associated with biexciton unbound states, i.e., exciton-exciton scattering states.