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On Information and Competition in Private Value Auctions

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  • Juan-José Ganuza
  • José S. Penalva

Abstract

This paper studies the relationship between the auctioneer's provision of information and the level of competition in private value auctions. We use a general notion of informativeness which allows us to compare the efficient with the (privately) optimal amount of information provided by the auctioneer. We show that it is not optimal for the auctioneer to provide the efficient level of information. We also look at the effect of competition as parameterized by the number of participants in the auction. We find that both the optimal and the efficient level of information increase with the number of participants in the auction, and both converge when the number of bidders goes to infinity.

Suggested Citation

  • Juan-José Ganuza & José S. Penalva, 2005. "On Information and Competition in Private Value Auctions," Working Papers 158, Barcelona School of Economics.
    • Handle: RePEc:bge:wpaper:158
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    References listed on IDEAS

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    Cited by:

    1. Vasiliki Skreta, 2011. "On the informed seller problem: optimal information disclosure," Review of Economic Design, Springer;Society for Economic Design, vol. 15(1), pages 1-36, March.
    2. Heski Bar‐Isaac & Guillermo Caruana & Vicente Cuñat, 2010. "Information Gathering and Marketing," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 19(2), pages 375-401, June.
    3. John Morgan & Dana Sisak & Felix Várdy, 2018. "The Ponds Dilemma," Economic Journal, Royal Economic Society, vol. 128(611), pages 1634-1682, June.
    4. Aniruddha Bagchi & Jomon Aliyas Paul, 2014. "Optimal Allocation of Resources in Airport Security: Profiling vs. Screening," Operations Research, INFORMS, vol. 62(2), pages 219-233, April.
    5. Bernhard Eckwert & Itzhak Zilcha, 2008. "Efficiency of Screening and Labor Income Inequality," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 10(1), pages 77-98, February.
    6. Cristián Troncoso-Valverde, 2018. "Releasing information in private-value second-price auctions," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 65(3), pages 781-817, May.
    7. Simon Board, 2009. "Revealing information in auctions: the allocation effect," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 38(1), pages 125-135, January.
    8. Carlos Canon, 2011. "Matching & Information Provision by One-Sided and Two-Sided Platforms," Working Papers 11-20, NET Institute, revised Oct 2011.
    9. Alexander E. Saak, 2008. "The Value Of Private Information In Monopoly," Journal of Industrial Economics, Wiley Blackwell, vol. 56(1), pages 169-189, March.

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    More about this item

    Keywords

    auctions; competition; Private Values; Optimal and Efficient Provision of Information;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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