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The value of information for auctioneers

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  • Hagedorn, Marcus

Abstract

An auctioneer wants to sell an indivisible object to one of multiple bidders, who have private information about their valuations of the object. A bidder's information structure determines the accuracy with which the bidder knows her private valuation. The main result of the paper is that the auctioneer's revenue is a convex function of bidders' information structures. One implication is that assigning asymmetric information structures instead of symmetric information structures to bidders is always revenue-enhancing. This paper generalizes a result of Bergemann and Pesendorfer [D. Bergemann, M. Pesendorfer, Information structures in optimal auctions, J. Econ. Theory 137 (2007) 580-609], who show that revenue-maximizing information structures are asymmetric.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Theory.

Volume (Year): 144 (2009)
Issue (Month): 5 (September)
Pages: 2197-2208

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Handle: RePEc:eee:jetheo:v:144:y:2009:i:5:p:2197-2208

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Web page: http://www.elsevier.com/locate/inca/622869

Related research

Keywords: Endogenous information Mechanism design Asymmetric information structures Common values;

References

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Citations

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Cited by:
  1. Lorentziadis, Panos L., 2012. "Optimal bidding in auctions of mixed populations of bidders," European Journal of Operational Research, Elsevier, vol. 217(3), pages 653-663.
  2. Sudipta Sarangi & Dan Kovenock & Matt Wiser, . "All-Pay Hex: A Multibattle Contest With Complementarities," Departmental Working Papers 2012-06, Department of Economics, Louisiana State University.
  3. Szech, Nora, 2011. "Optimal disclosure of costly information packages in auctions," Journal of Mathematical Economics, Elsevier, vol. 47(4-5), pages 462-469.
  4. Bikhchandani, Sushil, 2010. "Information acquisition and full surplus extraction," Journal of Economic Theory, Elsevier, vol. 145(6), pages 2282-2308, November.
  5. Maria Goltsman, 2011. "Optimal information transmission in a holdup problem," RAND Journal of Economics, RAND Corporation, vol. 42(3), pages 495-526, 09.

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