Advanced Search
MyIDEAS: Login to save this paper or follow this series

Competitive Bidding in Auctions with Private and Common Values

Contents:

Author Info

  • Jacob K. Goeree

    ()
    (California Institute of Technology)

  • Theo Offerman

    ()
    (CREED, University of Amsterdam)

Abstract

The objects for sale in most auctions possess both private and common value elements. This salient feature has not yet been incorporated into a strategic analysis of equilibrium bidding behaviour. This paper reports such an analysis for a stylised model in which bidders receive a private value signal and an independent common value signal. We show that more uncertainty about the common value has a negative effect on efficiency. Information provided by the seller decreases uncertainty, which raises efficiency and seller's revenues. Efficiency and revenues are also higher when more bidders enter the auction. This discussion paper has resulted in a publication in The Economic Journal , 2003, 113(489), 598-613.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://papers.tinbergen.nl/00044.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 00-044/1.

as in new window
Length:
Date of creation: 06 Jun 2000
Date of revision:
Handle: RePEc:dgr:uvatin:20000044

Contact details of provider:
Web page: http://www.tinbergen.nl

Related research

Keywords: Auctions; inefficiencies; information disclosure; competition;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
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.:
as in new window
  1. Paul Klemperer, 1999. "Auction Theory: A Guide to the Literature," Microeconomics, EconWPA 9903002, EconWPA.
  2. Jeremy Bulow & Ming Huang & Paul Klemperer, 1999. "Toeholds and Takeovers," Finance, EconWPA 9903005, EconWPA.
  3. P. Dasgupta & Eric Maskin, 1998. "Efficient Auctions," Harvard Institute of Economic Research Working Papers, Harvard - Institute of Economic Research 1857, Harvard - Institute of Economic Research.
  4. Ashenfelter, Orley, 1989. "How Auctions Work for Wine and Art," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 3(3), pages 23-36, Summer.
  5. Laffont, Jean-Jacques, 1997. "Game theory and empirical economics: The case of auction data 1," European Economic Review, Elsevier, Elsevier, vol. 41(1), pages 1-35, January.
  6. Timothy Feddersen & Wolfgang Pesendorfer, 1997. "Voting Behavior and Information Aggregation in Elections With Private Information," Levine's Working Paper Archive 1560, David K. Levine.
  7. McAfee, R. Preston & McMillan, John., 1990. "Bidding Rings," Working Papers, California Institute of Technology, Division of the Humanities and Social Sciences 726, California Institute of Technology, Division of the Humanities and Social Sciences.
  8. An, Mark Yuying, 1995. "Logconcavity versus Logconvexity: A Complete Characterization," Working Papers, Duke University, Department of Economics 95-03, Duke University, Department of Economics.
  9. Jeremy Bulow & Paul Klemperer, 1999. "Prices and the Winner's Curse," Game Theory and Information, EconWPA 9904003, EconWPA.
  10. Paul R. Milgrom, 1981. "Good News and Bad News: Representation Theorems and Applications," Bell Journal of Economics, The RAND Corporation, The RAND Corporation, vol. 12(2), pages 380-391, Autumn.
  11. Paul Klemperer, 1997. "Auctions with Almost Common Values: The Wallet Game and its Applications," Economics Series Working Papers, University of Oxford, Department of Economics 1998-W03, University of Oxford, Department of Economics.
  12. Bulow, Jeremy & Klemperer, Paul, 1996. "Auctions versus Negotiations," American Economic Review, American Economic Association, American Economic Association, vol. 86(1), pages 180-94, March.
  13. Jehiel, Phillipe & Moldovanu, Benny, 1999. "Efficient Design with Interdependent Valuations," Sonderforschungsbereich 504 Publications, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim 99-74, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
  14. Wilson, Robert, 1977. "A Bidding Model of Perfect Competition," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 44(3), pages 511-18, October.
  15. Caplin, A. & Nalebuff, B., 1989. "Aggregation And Imperfect Competition: On The Existence Of Equilibrium," Discussion Papers, Columbia University, Department of Economics 1989_30, Columbia University, Department of Economics.
  16. Michael H. Rothkopf, 1969. "A Model of Rational Competitive Bidding," Management Science, INFORMS, INFORMS, vol. 15(7), pages 362-373, March.
  17. Paarsch, Harry J., 1992. "Deciding between the common and private value paradigms in empirical models of auctions," Journal of Econometrics, Elsevier, Elsevier, vol. 51(1-2), pages 191-215.
  18. Bikhchandani, Sushil & Riley, John G., 1991. "Equilibria in open common value auctions," Journal of Economic Theory, Elsevier, Elsevier, vol. 53(1), pages 101-130, February.
  19. Paul Milgrom & Robert J. Weber, 1981. "A Theory of Auctions and Competitive Bidding," Discussion Papers, Northwestern University, Center for Mathematical Studies in Economics and Management Science 447R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  20. McMillan, John, 1995. "Why auction the spectrum?," Telecommunications Policy, Elsevier, Elsevier, vol. 19(3), pages 191-199, April.
  21. Holt, Charles A, Jr, 1980. "Competitive Bidding for Contracts under Alternative Auction Procedures," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 88(3), pages 433-45, June.
  22. Nicola Persico, 2000. "Information Acquisition in Auctions," Econometrica, Econometric Society, Econometric Society, vol. 68(1), pages 135-148, January.
  23. McAfee, R Preston & McMillan, John, 1987. "Auctions and Bidding," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 25(2), pages 699-738, June.
  24. Laffont & Ossard & Vuong, 1995. "Econometrics of first-price auctions," Working Papers 153731, Institut National de la Recherche Agronomique, France.
  25. Graham, Daniel A & Marshall, Robert C, 1987. "Collusive Bidder Behavior at Single-Object Second-Price and English Auctions," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 95(6), pages 1217-39, December.
  26. Wolfgang Pesendorfer & Jeroen M. Swinkels, 1996. "Efficiency and Information Aggregation in Auctions," Discussion Papers, Northwestern University, Center for Mathematical Studies in Economics and Management Science 1168, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:dgr:uvatin:20000044. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Antoine Maartens (+31 626 - 160 892)).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.