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Information revelation in procurement auctions with two-sided asymmetric information

A buyer needs to procure a good from either of two potential suppliers offering differentiated products and with privately observed costs. The buyer privately observes the own valuations for the products and (ex ante) decides how much of this information should be revealed to suppliers before they play a first score auction. We show that the more significant is each supplier’s private information on the own cost, the less information the buyer should reveal. Part of our analysis is linked to the comparison between a first and a second price auction in an asymmetric setup with a distribution shift.

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Paper provided by Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa in its series Working Papers - Economics with number wp2011_14.rdf.

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Length: 42 pages
Date of creation: 2011
Date of revision:
Handle: RePEc:frz:wpaper:wp2011_14.rdf
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  1. Asker, John & Cantillon, Estelle, 2004. "Properties of Scoring Auctions," CEPR Discussion Papers 4734, C.E.P.R. Discussion Papers.
  2. Nicola Doni & Domenico Menicucci, 2011. "Revenue Comparison in Asymmetric Auctions with Discrete Valuations," Economics Working Papers ECO2011/27, European University Institute.
  3. Monteiro, P. K., 2004. "First-Price auction symmetric equlibria with a general distribution," Economics Working Papers (Ensaios Economicos da EPGE) 568, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
  4. Domenico Colucci & Nicola Doni & Vincenzo Valori, 2011. "Information Disclosure in Procurement Auctions with Horizontally Differentiated Suppliers," Working Papers - Mathematical Economics 2011-02, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
  5. Asker, John & Cantillon, Estelle, 2007. "Procurement when Price and Quality Matter," CEPR Discussion Papers 6082, C.E.P.R. Discussion Papers.
  6. Chan, Chris & Laplagne, Patrick & Appels, David, 2003. "The Role of Auctions in Allocating Public Resources," Staff Research Papers 31916, Productivity Commission.
  7. Cason, Timothy N. & Gangadharan, Lata & Duke, Charlotte, 2002. "A Laboratory Study of Auctions for Reducing Non-Point Source Pollution," 2002 Conference (46th), February 13-15, 2002, Canberra 174066, Australian Agricultural and Resource Economics Society.
  8. Esther Gal-Or & Mordechai Gal-Or & Anthony Dukes, 2007. "Optimal information revelation in procurement schemes," RAND Journal of Economics, RAND Corporation, vol. 38(2), pages 400-418, 06.
  9. Todd Kaplan, 2012. "Communication of preferences in contests for contracts," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 51(2), pages 487-503, October.
  10. Charles J. Thomas & Bart J. Wilson, 2008. "Horizontal Product Differentiation in Auctions and Multilateral Negotiations," Working Papers 08-03, Chapman University, Economic Science Institute.
  11. Leonardo Rezende, 2009. "Biased procurement auctions," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 38(1), pages 169-185, January.
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