Sequential Information Disclosure in Auctions
We consider the design of an optimal auction in which the seller can determine the allocation and the disclosure rule of the mechanism. Thus, in contrast to the standard analysis of a optimal auctions, the seller can explicitly design the disclosure of the information received by each bidder as his private information. We show that the optimal disclosure rule is a sequential disclosure rule, implemented in an ascending price auction. In the optimal disclosure mechanism, each losing bidder learns his true valuation, but the winning bidder only learns that his valuation is sufficiently high to win the auction. We show that in the optimal auction, the posterior incentive and participation constraints of all the bidders are satisfied. In the special case in which the bidders have no private information initially, the seller can extract the entire surplus.
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References listed on IDEAS
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- Bergemann, Dirk & Pesendorfer, Martin, 2001.
"Information Structures in Optimal Auctions,"
CEPR Discussion Papers
2991, C.E.P.R. Discussion Papers.
- Elena Grigorieva & P. Herings & Rudolf Müller & Dries Vermeulen, 2007.
"The private value single item bisection auction,"
Springer, vol. 30(1), pages 107-118, January.
- Blumenthal, Marsha A, 1988. "Auctions with Constrained Information: Blind Bidding for Motion Pictures," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 191-98, May.
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