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Hiding Information in Open Auctions with Jump Bids

Author

Listed:
  • David Ettinger

    (LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine)

  • Fabio Michelucci

    (CERGE-EI - Charles University [Prague])

Abstract

We analyse a rationale for hiding information in open ascending auction formats. We focus on the incentives for a bidder to call a price higher than the highest standing one in order to prevent the remaining active bidders from aggregating more accurate information by observing the exact dropout values of the opponents who exit the auction. We show that the decision whether to allow jump bids or not can have a drastic impact on revenue and efficiency.

Suggested Citation

  • David Ettinger & Fabio Michelucci, 2016. "Hiding Information in Open Auctions with Jump Bids," Post-Print hal-01412208, HAL.
  • Handle: RePEc:hal:journl:hal-01412208
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01412208
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    References listed on IDEAS

    as
    1. Isaac, R. Mark & Salmon, Timothy C. & Zillante, Arthur, 2007. "A theory of jump bidding in ascending auctions," Journal of Economic Behavior & Organization, Elsevier, vol. 62(1), pages 144-164, January.
    2. Johannes Hörner & Nicolas Sahuguet, 2007. "Costly Signalling in Auctions -super-1," Review of Economic Studies, Oxford University Press, vol. 74(1), pages 173-206.
    3. Yongfu He & Peter Popkowski Leszczyc, 2013. "The impact of jump bidding in online auctions," Marketing Letters, Springer, vol. 24(4), pages 387-397, December.
    4. David Ettinger & Fabio Michelucci, 2012. "Hiding Information in Open Auctions," CERGE-EI Working Papers wp469, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    5. Hernando-Veciana, Ángel & Michelucci, Fabio, 2011. "Second best efficiency and the English auction," Games and Economic Behavior, Elsevier, vol. 73(2), pages 496-506.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. David Ettinger & Fabio Michelucci, 2016. "Creating a winner’s curse via jump bids," Review of Economic Design, Springer;Society for Economic Design, vol. 20(3), pages 173-186, September.
    2. repec:eee:ecolet:v:159:y:2017:i:c:p:214-216 is not listed on IDEAS
    3. Gonçalves, Ricardo & Ray, Indrajit, 2016. "Equilibria in a Japanese-English Auction with Discrete Bid Levels for the Wallet Game," Cardiff Economics Working Papers E2016/13, Cardiff University, Cardiff Business School, Economics Section.

    More about this item

    Keywords

    efficiency; jump bids; auctions;

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