IDEAS home Printed from https://ideas.repec.org/a/spr/joecth/v65y2018i3d10.1007_s00199-017-1039-y.html
   My bibliography  Save this article

Releasing information in private-value second-price auctions

Author

Listed:
  • Cristián Troncoso-Valverde

    (Universidad del Desarrollo)

Abstract

I investigate the incentives to release information in markets in which auctioneers running second-price auctions compete for buyers by releasing information about their products before buyers decide in which auction they wish to participate. I provide sufficient conditions for the existence of an equilibrium in which both sellers release information even if there are only two buyers in the market. This result is in contrast to previous findings reported in the literature showing that the optimal decision for a monopolist facing a fixed set of two buyers is to not release any information. Thus, the results of the paper suggest that competition between auctioneers strengthens the incentives to release information in markets in which selling mechanisms are second-price auctions.

Suggested Citation

  • Cristián Troncoso-Valverde, 2018. "Releasing information in private-value second-price auctions," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 65(3), pages 781-817, May.
    • Handle: RePEc:spr:joecth:v:65:y:2018:i:3:d:10.1007_s00199-017-1039-y
    DOI: 10.1007/s00199-017-1039-y
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s00199-017-1039-y
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s00199-017-1039-y?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Tan, Guofu & Yilankaya, Okan, 2006. "Equilibria in second price auctions with participation costs," Journal of Economic Theory, Elsevier, vol. 130(1), pages 205-219, September.
    2. Lewis, Tracy R & Sappington, David E M, 1994. "Supplying Information to Facilitate Price Discrimination," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 35(2), pages 309-327, May.
    3. McAfee, R Preston, 1993. "Mechanism Design by Competing Sellers," Econometrica, Econometric Society, vol. 61(6), pages 1281-1312, November.
    4. Burguet, Roberto & Sakovics, Jozsef, 1999. "Imperfect Competition in Auction Designs," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(1), pages 231-247, February.
    5. Paulo K. Monteiro & Flavio M. Menezes, 2000. "original papers : Auctions with endogenous participation," Review of Economic Design, Springer;Society for Economic Design, vol. 5(1), pages 71-89.
    6. Peters, Michael & Severinov, Sergei, 1997. "Competition among Sellers Who Offer Auctions Instead of Prices," Journal of Economic Theory, Elsevier, vol. 75(1), pages 141-179, July.
    7. ,, 2010. "Competing auctions: finite markets and convergence," Theoretical Economics, Econometric Society, vol. 5(2), May.
    8. W. R. van Zwet, 1979. "Mean, median, mode II," Statistica Neerlandica, Netherlands Society for Statistics and Operations Research, vol. 33(1), pages 1-5, March.
    9. Forand, Jean Guillaume, 2013. "Competing through information provision," International Journal of Industrial Organization, Elsevier, vol. 31(5), pages 438-451.
    10. Maxim Ivanov, 2013. "Information revelation in competitive markets," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 52(1), pages 337-365, January.
    11. Juan-José Ganuza & José S. Penalva, 2005. "On Information and Competition in Private Value Auctions," Working Papers 158, Barcelona School of Economics.
    12. Simon Board, 2009. "Revealing information in auctions: the allocation effect," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 38(1), pages 125-135, January.
    13. Bergemann, Dirk & Pesendorfer, Martin, 2007. "Information structures in optimal auctions," Journal of Economic Theory, Elsevier, vol. 137(1), pages 580-609, November.
    14. Juan-José Ganuza, 2004. "Ignorance Promotes Competition: An Auction Model of Endogenous Private Valuations," RAND Journal of Economics, The RAND Corporation, vol. 35(3), pages 583-598, Autumn.
    15. Green, Jerry & Laffont, Jean-Jacques, 1984. "Participation constraints in the vickrey auction," Economics Letters, Elsevier, vol. 16(1-2), pages 31-36.
    16. Roger B. Myerson, 1981. "Optimal Auction Design," Mathematics of Operations Research, INFORMS, vol. 6(1), pages 58-73, February.
    17. Juan-José Ganuza & José S. Penalva Zuasti, 2005. "On Information and Competition in Private Value Auctions," Working Papers wp2005_0503, CEMFI.
    18. Fuente,Angel de la, 2000. "Mathematical Methods and Models for Economists," Cambridge Books, Cambridge University Press, number 9780521585293.
    19. Mark Bagnoli & Ted Bergstrom, 2006. "Log-concave probability and its applications," Studies in Economic Theory, in: Charalambos D. Aliprantis & Rosa L. Matzkin & Daniel L. McFadden & James C. Moore & Nicholas C. Yann (ed.), Rationality and Equilibrium, pages 217-241, Springer.
    20. Lu, Jingfeng, 2006. "Endogenous entry and auctions design with private participation costs," MPRA Paper 934, University Library of Munich, Germany.
    21. Vagstad, Steinar, 2007. "Should auctioneers supply early information for prospective bidders?," International Journal of Industrial Organization, Elsevier, vol. 25(3), pages 597-614, June.
    22. An, Mark Yuying, 1998. "Logconcavity versus Logconvexity: A Complete Characterization," Journal of Economic Theory, Elsevier, vol. 80(2), pages 350-369, June.
    23. Ganuza, Juan-José & Penalva, José, 2014. "Information disclosure in optimal auctions," INDEM - Working Paper Business Economic Series id-14-02, Instituto para el Desarrollo Empresarial (INDEM).
    24. Milgrom, Paul R & Weber, Robert J, 1982. "A Theory of Auctions and Competitive Bidding," Econometrica, Econometric Society, vol. 50(5), pages 1089-1122, September.
    25. Alex Gershkov, 2009. "Optimal auctions and information disclosure," Review of Economic Design, Springer;Society for Economic Design, vol. 13(4), pages 335-344, December.
    26. Juan-JosÈ Ganuza & JosÈ S. Penalva, 2010. "Signal Orderings Based on Dispersion and the Supply of Private Information in Auctions," Econometrica, Econometric Society, vol. 78(3), pages 1007-1030, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Todd R. Kaplan & David Wettstein, 2022. "Two-stage contests with preferences over style," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 74(4), pages 1141-1161, November.
    2. Forand, Jean Guillaume, 2013. "Competing through information provision," International Journal of Industrial Organization, Elsevier, vol. 31(5), pages 438-451.
    3. Landi, Massimiliano & Menicucci, Domenico & Sarychev, Andrey, 2023. "Competing auctions with non-identical objects," Journal of Mathematical Economics, Elsevier, vol. 106(C).
    4. Hanzhe Zhang, 2021. "Prices versus auctions in large markets," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 72(4), pages 1297-1337, November.
    5. Wataru Tamura, 2013. "Auction Platform Design and the Linkage Principle," CARF F-Series CARF-F-330, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
    6. Wataru Tamura, 2016. "Auction Platform Design and the Linkage Principle," Journal of Industrial Economics, Wiley Blackwell, vol. 64(2), pages 201-225, June.
    7. Gino Loyola, 2021. "Effects of competition in first-price auctions," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 71(4), pages 1527-1567, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Forand, Jean Guillaume, 2013. "Competing through information provision," International Journal of Industrial Organization, Elsevier, vol. 31(5), pages 438-451.
    2. Lorentziadis, Panos L., 2016. "Optimal bidding in auctions from a game theory perspective," European Journal of Operational Research, Elsevier, vol. 248(2), pages 347-371.
    3. Simon Board, 2009. "Revealing information in auctions: the allocation effect," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 38(1), pages 125-135, January.
    4. Vasiliki Skreta, 2011. "On the informed seller problem: optimal information disclosure," Review of Economic Design, Springer;Society for Economic Design, vol. 15(1), pages 1-36, March.
    5. Maxim Ivanov, 2013. "Information revelation in competitive markets," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 52(1), pages 337-365, January.
    6. Ganuza, Juan-José & Penalva, Jose, 2019. "Information disclosure in optimal auctions," International Journal of Industrial Organization, Elsevier, vol. 63(C), pages 460-479.
    7. Alexandre de Corniere & Romain De Nijs, 2013. "Online Advertising and Privacy," Economics Series Working Papers 650, University of Oxford, Department of Economics.
    8. Wataru Tamura, 2016. "Auction Platform Design and the Linkage Principle," Journal of Industrial Economics, Wiley Blackwell, vol. 64(2), pages 201-225, June.
    9. Diego Aycinena & Lucas Rentschler, 2018. "Auctions with endogenous participation and an uncertain number of bidders: experimental evidence," Experimental Economics, Springer;Economic Science Association, vol. 21(4), pages 924-949, December.
    10. Zhou, Jidong, 2021. "Mixed bundling in oligopoly markets," Journal of Economic Theory, Elsevier, vol. 194(C).
    11. Axel Ockenfels & David Reiley & Abdolkarim Sadrieh, 2006. "Online Auctions," NBER Working Papers 12785, National Bureau of Economic Research, Inc.
    12. Hao Li & Xianwen Shi, 2017. "Discriminatory Information Disclosure," American Economic Review, American Economic Association, vol. 107(11), pages 3363-3385, November.
    13. Florian Hoffmann & Roman Inderst & Marco Ottaviani, 2013. "Hypertargeting, Limited Attention, and Privacy: Implications for Marketing and Campaigning," Working Papers 479, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    14. Maxim Ivanov, 2021. "Optimal monotone signals in Bayesian persuasion mechanisms," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 72(3), pages 955-1000, October.
    15. Daniel Z. Li, 2016. "Disclosure or not, When There are Three Bidders?," Economics Bulletin, AccessEcon, vol. 36(1), pages 349-354.
    16. Roberto Burguet, 2000. "Auction theory: a guided tour," Investigaciones Economicas, Fundación SEPI, vol. 24(1), pages 3-50, January.
    17. Maslov, Alexander & Schwartz, Jesse A., 2022. "Imperfect competition in online auctions," Journal of Mathematical Economics, Elsevier, vol. 102(C).
    18. Cristian Troncoso-Valverde, 2013. "Competing Auctions with Heterogeneous Goods," Working Papers 46, Facultad de Economía y Empresa, Universidad Diego Portales.
    19. Karca D. Aral & Damian R. Beil & Luk N. Van Wassenhove, 2021. "Supplier Sustainability Assessments in Total‐Cost Auctions," Production and Operations Management, Production and Operations Management Society, vol. 30(4), pages 902-920, April.
    20. Daniel Z. Li, 2013. "Revealing Product Information to Bidders with Differentiated Preferences," Economics Bulletin, AccessEcon, vol. 33(3), pages 2235-2244.

    More about this item

    Keywords

    Second-price auctions; Competing auctions; Information structures; Private provision of information;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:joecth:v:65:y:2018:i:3:d:10.1007_s00199-017-1039-y. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.