Information Acquisition In Auctions: Sealed Bids Vs. Open Bids

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Information Acquisition In Auctions: Sealed Bids Vs. Open Bids

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Ángel Hernando Veciana () (Universidad de Alicante)

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Angel Hernando-Veciana

Abstract

This paper studies the incentives of a bidder to acquire information in anauction when her information acquisition decision is observed by the otherbidders before they bid. Our results show that the sealed bid (second price)auction induces more information acquisition about a common component ofthe value than the open (English) auction, but less about the private componentof the value. Moreover, under our assumptions more information about theprivate value and less information about the common value improves efficiencyand revenue in some sense. Consequently, our results suggest new argumentsin favor of the open auction.

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Publisher Info
Paper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie AD with number 2006-10.

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Length: 32 pages
Date of creation: Jun 2006
Date of revision:
Publication status: Published by Ivie
Handle: RePEc:ivi:wpasad:2006-10

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Article
- Hernando-Veciana, Ángel, 2009. "Information acquisition in auctions: Sealed bids vs. open bids," Games and Economic Behavior, Elsevier, vol. 65(2), pages 372-405, March. [Downloadable!] (restricted)

Find related papers by JEL classification:
D41 - Microeconomics - - Market Structure and Pricing - - - Perfect Competition
D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information

This paper has been announced in the following NEP Reports:

NEP-ALL-2006-06-17 (All new papers)
NEP-FMK-2006-06-17 (Financial Markets)
NEP-GTH-2006-06-17 (Game Theory)
NEP-MIC-2006-06-17 (Microeconomics)

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.:

Ángel Hernando Veciana & Michael Tröge, 2005. "The Insider'S Curse," Working Papers. Serie AD 2005-08, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
Other versions:
- Angel Hernando-Veciana & Michael Tröge, 2005. "The Insider's Curse," Microeconomics 0503012, EconWPA. [Downloadable!]
Jonathan Levin & Susan Athey, 2001. "The Value of Information in Monotone Decision Problems," Working Papers 01003, Stanford University, Department of Economics. [Downloadable!]
Other versions:
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Other versions:
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Hernando-Veciana, Angel, 2004. "Successful uninformed bidding," Games and Economic Behavior, Elsevier, vol. 48(1), pages 29-53, July. [Downloadable!] (restricted)
Other versions:
- Ángel Hernando Veciana, 2001. "Successful Uninformed Bidding," Working Papers. Serie AD 2001-06, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
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Other versions:
- Dirk Bergemann & Juuso Vaimaki, 2000. "Information Acquisition and Efficient Mechanism Design," Cowles Foundation Discussion Papers 1248, Cowles Foundation, Yale University. [Downloadable!]
Olivier Compte & Philippe Jehiel, 2005. "Auctions and Information acquisition: Sealed-bid or Dynamic Formats?," Levine's Bibliography 784828000000000495, UCLA Department of Economics. [Downloadable!]
Athey, Susan, 2001. "Single Crossing Properties and the Existence of Pure Strategy Equilibria in Games of Incomplete Information," Econometrica, Econometric Society, vol. 69(4), pages 861-89, July.
Other versions:
- Athey, S., 1997. "Sigle Crossing Properties and the Existence of Pure Strategy Equilibria in Games of Incomplete Information," Working papers 97-11, Massachusetts Institute of Technology (MIT), Department of Economics.
Wolfgang Pesendorfer & Jeroen M. Swinkels, 1997. "The Loser's Curse and Information Aggregation in Common Value Auctions," Econometrica, Econometric Society, vol. 65(6), pages 1247-1282, November.
Other versions:
- Wolfgang Pesendorfer & Jeroen M. Swinkels, 1995. "The Loser's Curse and Information Aggregation in Common Value Auctions," Discussion Papers 1147, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
Nicola Persico, 2000. "Information Acquisition in Auctions," Econometrica, Econometric Society, vol. 68(1), pages 135-148, January.
Other versions:
- Nicola Persico, 1997. "Information Acquisition in Auctions," UCLA Economics Working Papers 762, UCLA Department of Economics. [Downloadable!]

Full references

Cited by:
(explanations, 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.)

Ángel Hernando Veciana & Michael Tröge, 2005. "The Insider'S Curse," Working Papers. Serie AD 2005-08, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
Other versions:
- Angel Hernando-Veciana & Michael Tröge, 2005. "The Insider's Curse," Microeconomics 0503012, EconWPA. [Downloadable!]

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