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

Listed author(s):
  • Gopal Das Varma


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

Registered author(s):

    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.

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    Article provided by Springer & Society for Economic Design in its journal Review of Economic Design.

    Volume (Year): 7 (2002)
    Issue (Month): 2 ()
    Pages: 155-171

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    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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