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The Effect of Bidding Information in Ascending Auctions


  • Mun Chuia

    () (School of Economics and Smith's Center for Experimental Economics Research, Shanghai Jiao Tong University, China)

  • David Porter

    (Economic Science Institute, Chapman University)

  • Stephen Rassenti

    (Economic Science Institute, Chapman University)

  • Vernon Smith

    (Economic Science Institute, Chapman University)


We study the effect of the drop out and reenter information in an environment where bidders' values involve both private and common value components. We find that (1) providing bidding information does not have a significant effect on expected revenue and expected efficiency. (2) The effect of information on winner's expected profit depends on the range of uncertainty of the common value component and the level of Nash profit prediction, which the auctioneer has no a priori knowledge. In our environment, where bidders have a private component to their value and the auction takes place in ascending clock format, (3) bidders do not suffer from the winner's curse when information is not provided. (4) Information substantially increases the variability of revenue and winner?s profit when the range of uncertainty of the common value component is large. (5) Bidders? response to information depends on the range of uncertainty.

Suggested Citation

  • Mun Chuia & David Porter & Stephen Rassenti & Vernon Smith, 2011. "The Effect of Bidding Information in Ascending Auctions," Working Papers 11-13, Chapman University, Economic Science Institute.
  • Handle: RePEc:chu:wpaper:11-13

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    References listed on IDEAS

    1. Ronald M. Harstad & Michael H. Rothkopf, 2000. "An "Alternating Recognition" Model of English Auctions," Management Science, INFORMS, vol. 46(1), pages 1-12, January.
    2. Kirchkamp, Oliver & Moldovanu, Benny, 2004. "An experimental analysis of auctions with interdependent valuations," Games and Economic Behavior, Elsevier, vol. 48(1), pages 54-85, July.
    3. Mikoucheva, Anna & Sonin, Konstantin, 2004. "Information revelation and efficiency in auctions," Economics Letters, Elsevier, vol. 83(3), pages 277-284, June.
    4. R. Preston McAfee & John McMillan, 1996. "Analyzing the Airwaves Auction," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 159-175, Winter.
    5. Krishna, Vijay, 2009. "Auction Theory," Elsevier Monographs, Elsevier, edition 2, number 9780123745071.
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    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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