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Manipulative Auction Design

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  • Philippe Jehiel

Abstract

This paper considers an auction design framework in which bidders get partial feedback about the distribution of bids submitted in earlier auctions: either bidders are asymmetric but past bids are disclosed in an anonymous way or several auction formats are being used and the distribution of bids but not the associated formats are disclosed. I employ the analogy-based expectation equilibrium (Jehiel, 2005) to model such situations. First-price auction in which past bids are disclosed in an anonymous way generates more revenues than the second-price auction while achieving an efficient outcome in the asymmetric private values two-bidder case with independent distributions. Besides, by using several auction formats with coarse feedback a designer can always extract more revenues than in Myerson's optimal auction, and yet less revenues than in the full information case whenever bidders enjoy ex-post quitting rights and the assignment and payment rules are monotonic in bids. These results suggest an important role of feedback disclosure as a novel instrument in mechanism design.

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Bibliographic Info

Paper provided by UCLA Department of Economics in its series Levine's Bibliography with number 122247000000001547.

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Date of creation: 07 Sep 2007
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Handle: RePEc:cla:levrem:122247000000001547

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  1. Susan Athey & Philip A. Haile, 2006. "Empirical Models of Auctions," NBER Working Papers 12126, National Bureau of Economic Research, Inc.
  2. Philippe Jehiel & Frédéric Koessler, 2006. "Revisiting Games of Incomplete Information with Analogy-Based Expectations," Levine's Bibliography 122247000000000252, UCLA Department of Economics.
  3. Harsanyi, John C, 1995. "Games with Incomplete Information," American Economic Review, American Economic Association, American Economic Association, vol. 85(3), pages 291-303, June.
  4. Ignacio Esponda, 2008. "Information feedback in first price auctions," RAND Journal of Economics, RAND Corporation, RAND Corporation, vol. 39(2), pages 491-508.
  5. Philippe Jehiel & Steffen Huck & Tom Rutter, 2007. "Learning Spillover and Analogy-based Expectations: a Multi-Game Experiment," Levine's Bibliography 843644000000000120, UCLA Department of Economics.
  6. Drew Fudenberg & David K. Levine, 1998. "Learning in Games," Levine's Working Paper Archive 2222, David K. Levine.
  7. Philippe Jehiel & David Ettinger, 2005. "Towards a theory of deception," PSE Working Papers, HAL halshs-00590767, HAL.
  8. Jehiel, Philippe, 2005. "Analogy-based expectation equilibrium," Journal of Economic Theory, Elsevier, Elsevier, vol. 123(2), pages 81-104, August.
  9. John G. Riley & William Samuelson, 1979. "Optimal Auctions," UCLA Economics Working Papers, UCLA Department of Economics 152, UCLA Department of Economics.
  10. repec:wop:humbsf:2000-72 is not listed on IDEAS
  11. Jackson, Matthew O. & Kalai, Ehud, 1997. "Social Learning in Recurring Games," Games and Economic Behavior, Elsevier, Elsevier, vol. 21(1-2), pages 102-134, October.
  12. Maskin, Eric & Riley, John, 2000. "Asymmetric Auctions," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 67(3), pages 413-38, July.
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Cited by:
  1. Gábor Virág, 2013. "First-price auctions with resale: the case of many bidders," Economic Theory, Springer, Springer, vol. 52(1), pages 129-163, January.
  2. François Maréchal & Pierre-Henri Morand, 2012. "The public release of information in first-price sealed-bid auctions," Review of Economic Design, Springer, Springer, vol. 16(4), pages 323-330, December.
  3. Grimm, Veronika & Mengel, Friederike, 2012. "An experiment on learning in a multiple games environment," Journal of Economic Theory, Elsevier, Elsevier, vol. 147(6), pages 2220-2259.
  4. Philippe Jehiel & Laurent Lamy, 2011. "Absolute auctions and secret reserve prices: Why are they used?," Levine's Working Paper Archive 786969000000000316, David K. Levine.

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