The Effect of Bidding Information in Ascending Auctions
AbstractWe study the effect of the drop out and reenter information in an environment where bidders' values involve both private and common value components. We find that (1) providing bidding information does not have a significant effect on expected revenue and expected efficiency. (2) The effect of information on winner's expected profit depends on the range of uncertainty of the common value component and the level of Nash profit prediction, which the auctioneer has no a priori knowledge. In our environment, where bidders have a private component to their value and the auction takes place in ascending clock format, (3) bidders do not suffer from the winner's curse when information is not provided. (4) Information substantially increases the variability of revenue and winner?s profit when the range of uncertainty of the common value component is large. (5) Bidders? response to information depends on the range of uncertainty.
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Bibliographic InfoPaper provided by Chapman University, Economic Science Institute in its series Working Papers with number 11-13.
Length: 45 pages
Date of creation: 2011
Date of revision:
Find related papers by JEL classification:
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-12-13 (All new papers)
- NEP-CTA-2011-12-13 (Contract Theory & Applications)
- NEP-EXP-2011-12-13 (Experimental Economics)
- NEP-MIC-2011-12-13 (Microeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Anna Mikusheva & Konstantin Sonin, 2002.
"Information Revelation and Efficiency in Auctions,"
w0021, Center for Economic and Financial Research (CEFIR).
- Kirchkamp, Oliver & Moldovanu, Benny, 2004.
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Games and Economic Behavior,
Elsevier, vol. 48(1), pages 54-85, July.
- Kirchkamp, Oliver & Moldovanu, Benny, 2000. "An experimental analysis of auctions with interdependent valuations," Sonderforschungsbereich 504 Publications 00-10, Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim.
- R. Preston McAfee & John McMillan, 1996. "Analyzing the Airwaves Auction," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 159-175, Winter.
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