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Information disclosure in optimal auctions

Author

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  • Ganuza, Juan-José
  • Penalva, José

Abstract

A celebrated result in auction theory is that the optimal reserve price in the standard private value setting does not depend on the number of bidders. We modify the framework by considering that the seller controls the accuracy with which bidders learn their valuations, and show that in such a case, the greater the number of bidders the more restrictive the reserve price. We also show that the auctioneer provides more information when using an optimal auction mechanism than when the object is always sold.

Suggested Citation

  • Ganuza, Juan-José & Penalva, José, 2014. "Information disclosure in optimal auctions," INDEM - Working Paper Business Economic Series id-14-02, Instituto para el Desarrollo Empresarial (INDEM).
    • Handle: RePEc:cte:idrepe:id-14-02
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    Cited by:

    1. 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.

    More about this item

    Keywords

    Auctions;

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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