Information advantage and dominant strategies in second-price auctions
AbstractWe study a general model of common-value second-price auctions with differential information. We show that one of the bidders has an information advantage over the other bidders if and only if he possesses a dominant strategy. A dominant strategy is, in fact, unique, and is given by the conditional expectation of the common value with respect to his information field. Furthermore, when a bidder has information advantage, other bidders cannot make a profit.
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Bibliographic InfoPaper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2000055.
Date of creation: 00 Nov 2000
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More information through EDIRC
common-value second-price auctions; differential information; dominant strategies; information advantage.;
Find related papers by JEL classification:
- 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
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.:
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