Information Effects in Multi-Unit Dutch Auctions
This study compares bidding behavior in a multi-unit uniform-price descending price (Dutch) auction under four different information conditions. Bidders are either informed of the number of bidders in the auction, or know that it is one of two possible sizes; they also either know the number of units remaining for sale or are unaware of how many units have been taken by other bidders. We find that revealing group size decreases bids, and therefore revenue, if units remaining are not shown. When group size is unknown the price also falls if the number of units remaining is revealed. The most efficient and largest revenue outcome occurs when bidders are not provided information on either group size or units remaining.
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- McAfee, R. Preston & McMillan, John, 1987. "Auctions with a stochastic number of bidders," Journal of Economic Theory, Elsevier, vol. 43(1), pages 1-19, October.
- William Vickrey, 1961. "Counterspeculation, Auctions, And Competitive Sealed Tenders," Journal of Finance, American Finance Association, vol. 16(1), pages 8-37, 03.
- Douglas Dyer & John H. Kagel & Dan Levin, 1989. "Resolving Uncertainty about the Number of Bidders in Independent Private-Value Auctions: An Experimental Analysis," RAND Journal of Economics, The RAND Corporation, vol. 20(2), pages 268-279, Summer.