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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- Dirk Bergemann & Martin Pesendorfer, 2001.
"Information Structures in Optimal Auctions,"
Cowles Foundation Discussion Papers
1323, Cowles Foundation for Research in Economics, Yale University.
- 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.
- Grigorieva,Elena & Herings,P. Jean-Jacques & Müller,Rudolf & Vermeulen,Dries, 2002.
"The private value single item bisection auction,"
051, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
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