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Orchestrating Information Acquisition

Author

Listed:
  • Jingfeng Lu
  • Lixin Ye
  • Xin Feng

Abstract

We study how to orchestrate information acquisition in an environment where bidders endowed with original estimates ("types") about their private values can acquire further information by incurring a cost. We consider both single-round and fully sequential short-listing rules. The optimal single-round shortlisting rule admits the set of most efficient bidders that maximizes expected virtual surplus adjusted by the second-stage signal and information acquisition cost. When shortlisting is fully sequential, at each round, the most efficient remaining bidder is admitted provided that her conditional expected contribution to the virtual surplus is positive.

Suggested Citation

  • Jingfeng Lu & Lixin Ye & Xin Feng, 2021. "Orchestrating Information Acquisition," American Economic Journal: Microeconomics, American Economic Association, vol. 13(4), pages 420-465, November.
    • Handle: RePEc:aea:aejmic:v:13:y:2021:i:4:p:420-65
    DOI: 10.1257/mic.20190114
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    Cited by:

    1. Huiyi Guo & Wei He & Bin Liu, 2022. "Learning by Consuming: Optimal Pricing with Endogenous Information Provision," Papers 2209.01453, arXiv.org.
    2. Agastya, Murali & Feng, Xin & Lu, Jingfeng, 2023. "Auction design with shortlisting when value discovery is covert," Journal of Mathematical Economics, Elsevier, vol. 107(C).
    3. Shin, Dongsoo & Yun, Sungho, 2023. "Information acquisition and countervailing incentives," Journal of Mathematical Economics, Elsevier, vol. 107(C).

    More about this item

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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