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original papers : Who else is bidding? The Pareto optimality of disclosing bidder identities

Author

Listed:
  • Gopal Das Varma

    (Fuqua School of Business, Duke University, Box 90120, Durham, NC 27708, USA)

Abstract

This paper examines whether the seller of an object should reveal the identities of the participating bidders before bids become due. It is shown that when bidders experience identity dependent externalities and auction participation is exogenous, then for a large class of standard auction mechanisms, a policy of revelation serves to realize a higher surplus because it improves the accuracy of each bidder's estimate of her ex-post willingness-to-pay, and therefore changes the auction allocation in a more ex-post efficient manner. Furthermore, it is shown that the policy of revelation increases both the expected seller revenues as well as ex-ante expected bidder payoffs.

Suggested Citation

  • Gopal Das Varma, 2002. "original papers : Who else is bidding? The Pareto optimality of disclosing bidder identities," Review of Economic Design, Springer;Society for Economic Design, vol. 7(2), pages 155-171.
    • Handle: RePEc:spr:reecde:v:7:y:2002:i:2:p:155-171
    Note: Received: 4 February 2000 / Accepted: 15 November 2000
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    Cited by:

    1. Jehiel, Philippe & Moldovanu, Benny, 2005. "Allocative and Informational Externalities in Auctions and Related Mechanisms," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 142, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    2. Burkett, Justin, 2018. "Information disclosure in auctions with downstream competition," Economics Letters, Elsevier, vol. 163(C), pages 22-26.

    More about this item

    Keywords

    Auction; externalities; efficiency; mechanism design;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D62 - Microeconomics - - Welfare Economics - - - Externalities

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