Information acquisition during a Dutch auction
AbstractIn this paper we consider equilibrium behavior in a Dutch (descending price) auction where the bidders are uninformed of their valuations with probability 1-q and can acquire information about their valuation at a positive cost during the auction. We assume that the information acquisition activity is covert. We characterize the equilibrium behavior in a setting where bidders are ex ante symmetric and have independent private values. We show that, if the number of bidders is large, the Dutch auction produces more revenue than would a first price auction.
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Bibliographic InfoPaper provided by Bank of Finland in its series Research Discussion Papers with number 7/2010.
Length: 30 pages
Date of creation: 22 Feb 2010
Date of revision:
auctions; information acquisition;
Find related papers by JEL classification:
- 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
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- Miettinen, Paavo, 2012. "Information acquisition during a Dutch auction," Research Discussion Papers 8/2012, Bank of Finland.
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