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The value of information for auctioneers

  • Hagedorn, Marcus

An auctioneer wants to sell an indivisible object to one of multiple bidders, who have private information about their valuations of the object. A bidder's information structure determines the accuracy with which the bidder knows her private valuation. The main result of the paper is that the auctioneer's revenue is a convex function of bidders' information structures. One implication is that assigning asymmetric information structures instead of symmetric information structures to bidders is always revenue-enhancing. This paper generalizes a result of Bergemann and Pesendorfer [D. Bergemann, M. Pesendorfer, Information structures in optimal auctions, J. Econ. Theory 137 (2007) 580-609], who show that revenue-maximizing information structures are asymmetric.

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Article provided by Elsevier in its journal Journal of Economic Theory.

Volume (Year): 144 (2009)
Issue (Month): 5 (September)
Pages: 2197-2208

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Handle: RePEc:eee:jetheo:v:144:y:2009:i:5:p:2197-2208
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622869

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