The value of an informed bidder in common value auctions
AbstractI compare two information structures in a common value first-price auction with two bidders: In one, each of the two bidders knows only his own signal about the value of the object, and in the other, one of the bidders learns his opponent's signal as well. Gaining the additional information in the second information structure makes the informed bidder worse off if the value is submodular in the bidders' signals and better off if it is supermodular. If the value is supermodular, then the seller's revenue tends to be lower with the informed bidder than without.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Theory.
Volume (Year): 143 (2008)
Issue (Month): 1 (November)
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Web page: http://www.elsevier.com/locate/inca/622869
Common value First-price auction Informed bidder;
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