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Linkage principle, Multi-dimensional Signals and Blind Auctions


  • Thierry, FOUCAULT


  • Stefano, LOVO



We compare the seller’s expected revenue in a second price sealed bid auction for a single object in which bidders receive multidimensional signals. Bidders’ valuations for the object depend on their signals and a signal observed privately by the seller. We show in various examples that the seller can be better off not revealing publicly his signal. Hence the linkage principle does not necessarily hold when bidders receive multidimensional signals.

Suggested Citation

  • Thierry, FOUCAULT & Stefano, LOVO, 2003. "Linkage principle, Multi-dimensional Signals and Blind Auctions," Les Cahiers de Recherche 785, HEC Paris.
  • Handle: RePEc:ebg:heccah:0785

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    References listed on IDEAS

    1. Bergemann, Dirk & Pesendorfer, Martin, 2007. "Information structures in optimal auctions," Journal of Economic Theory, Elsevier, vol. 137(1), pages 580-609, November.
    2. Kavajecz, Kenneth A. & Keim, Donald B., 2005. "Packaging Liquidity: Blind Auctions and Transaction Efficiencies," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 40(03), pages 465-492, September.
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    Cited by:

    1. Bergemann, Dirk & Pesendorfer, Martin, 2007. "Information structures in optimal auctions," Journal of Economic Theory, Elsevier, vol. 137(1), pages 580-609, November.

    More about this item


    Auction Theory; Linkage Principle; Multidimensional Signals; Blind Auctions;

    JEL classification:

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

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