Efficiency and Information Aggregation in Auctions
The tension between allocative efficiency and information aggregation is explored in the context of an auction: k identical objects of unknown quality are auctioned off to n bidders whose tastes affect their valuation of an object of given quality. Bidders receive a signal about the quality of the objects. The k highest bidders get an object and pay a price equal to the k + first highest bid. We find conditions under which, in the limit, objects are allocated efficiently to those with the highest tastes, and price converges in probability to the value of an object to the marginal taste type.
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Volume (Year): 90 (2000)
Issue (Month): 3 (June)
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- Timothy Feddersen & Wolfgang Pesendorfer, 1994.
"Voting Behavior and Information Aggregation in Elections with Private Information,"
1117, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Timothy Feddersen & Wolfgang Pesendorfer, 1997. "Voting Behavior and Information Aggregation in Elections with Private Information," Econometrica, Econometric Society, vol. 65(5), pages 1029-1058, September.
- Timothy Feddersen & Wolfgang Pesendorfer, 1997. "Voting Behavior and Information Aggregation in Elections With Private Information," Levine's Working Paper Archive 1560, David K. Levine.
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- Paul Milgrom & Robert J. Weber, 1981.
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447R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Jeroen M. Swinkels & Wolfgang Pesendorfer, 2000.
"Efficiency and Information Aggregation in Auctions,"
American Economic Review,
American Economic Association, vol. 90(3), pages 499-525, June.
- Wolfgang Pesendorfer & Jeroen M. Swinkels, 1996. "Efficiency and Information Aggregation in Auctions," Discussion Papers 1168, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Wilson, Robert, 1977. "A Bidding Model of Perfect Competition," Review of Economic Studies, Wiley Blackwell, vol. 44(3), pages 511-18, October.
- Haile,P.A., 1999. "Auctions with resale," Working papers 33, Wisconsin Madison - Social Systems.
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