Sequential Information Disclosure in Auctions
AbstractWe consider the design of an optimal auction in which the seller can determine the allocation and the disclosure rule of the mechanism. Thus, in contrast to the standard analysis of a optimal auctions, the seller can explicitly design the disclosure of the information received by each bidder as his private information. We show that the optimal disclosure rule is a sequential disclosure rule, implemented in an ascending price auction. In the optimal disclosure mechanism, each losing bidder learns his true valuation, but the winning bidder only learns that his valuation is sufficiently high to win the auction. We show that in the optimal auction, the posterior incentive and participation constraints of all the bidders are satisfied. In the special case in which the bidders have no private information initially, the seller can extract the entire surplus.
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Bibliographic InfoPaper provided by David K. Levine in its series Levine's Working Paper Archive with number 786969000000000771.
Date of creation: 19 Sep 2013
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Other versions of this item:
- Dirk Bergemann & Achim Wambach, 2013. "Sequential Information Disclosure in Auctions," Cowles Foundation Discussion Papers, Cowles Foundation for Research in Economics, Yale University 1900, Cowles Foundation for Research in Economics, Yale University.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
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.:
- Grigorieva,Elena & Herings,P. Jean-Jacques & Müller,Rudolf & Vermeulen,Dries, 2002.
"The private value single item bisection auction,"
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- Bergemann, Dirk & Pesendorfer, Martin, 2001.
"Information Structures in Optimal Auctions,"
CEPR Discussion Papers, C.E.P.R. Discussion Papers
2991, C.E.P.R. Discussion Papers.
- Dirk Bergemann & Martin Pesendorfer, 2001. "Information Structures in Optimal Auctions," Cowles Foundation Discussion Papers, Cowles Foundation for Research in Economics, Yale University 1323, Cowles Foundation for Research in Economics, Yale University.
- Hao Li & Xianwen Shi, 2013. "Discriminatory Information Disclosure," Working Papers, University of Toronto, Department of Economics tecipa-497, University of Toronto, Department of Economics.
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