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Information Choice in Auctions

Author

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  • Bobkova, Nina

Abstract

The choice of an auction mechanism influences which object characteristics bidders learn about and whether the object is allocated efficiently. Some object characteristics are valued equally by all bidders and thus are inconsequential for the efficient allocation. Others matter only to certain bidders, and thus determine the bidder with the highest object value. I show that the efficient auction is the second-price auction: it induces bidders to learn exclusively about object characteristics which matter only to them. An independent private value framework arises endogenously.

Suggested Citation

  • Bobkova, Nina, 2021. "Information Choice in Auctions," CEPR Discussion Papers 16832, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:16832
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    More about this item

    Keywords

    Information choice; Endogeneous interdependence; Multidimensional auctions; Interdependent values; Accuracy;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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