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Manipulative Auction Design

Listed author(s):
  • Philippe Jehiel

    (PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - ENPC - École des Ponts ParisTech - EHESS - École des hautes études en sciences sociales - INRA - Institut National de la Recherche Agronomique - ENS Paris - École normale supérieure - Paris, PSE - Paris School of Economics, University College of London [London])

This paper considers an auction design framework in which bidders get partial feedback about the distribution of bids submitted in earlier auctions: either bidders are asymmetric but past bids are disclosed in an anonymous way or several auction formats are being used and the distribution of bids, but not the associated formats, is disclosed. I employ the analogy-based expectation equilibrium (Jehiel 2005) to model such situations. First-price auctions in which past bids are disclosed in an anonymous way generate more revenues than second-price auctions while achieving an efficient outcome in the asymmetric private values two-bidder case with independent distributions. Besides, by using several auction formats with coarse feedback, a designer can always extract more revenues than in Myerson's optimal auction, and yet less revenues than in the full information case whenever bidders enjoy ex post quitting rights and the assignment and payment rules are monotonic in bids. These results suggest an important role of feedback disclosure as a novel instrument in mechanism design.

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Paper provided by HAL in its series Post-Print with number halshs-00754541.

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Date of creation: May 2011
Publication status: Published in Theoretical Economics, Econometric Society, 2011, 6 (2), pp.185-217. <10.3982/TE687>
Handle: RePEc:hal:journl:halshs-00754541
DOI: 10.3982/TE687
Note: View the original document on HAL open archive server: https://hal-pjse.archives-ouvertes.fr/halshs-00754541
Contact details of provider: Web page: https://hal.archives-ouvertes.fr/

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  1. Jehiel, Philippe & Koessler, Frédéric, 2008. "Revisiting games of incomplete information with analogy-based expectations," Games and Economic Behavior, Elsevier, vol. 62(2), pages 533-557, March.
  2. David Ettinger & Philippe Jehiel, 2004. "Towards a Theory of Deception," Levine's Bibliography 122247000000000247, UCLA Department of Economics.
  3. Fudenberg, Drew & Levine, David, 1998. "Learning in games," European Economic Review, Elsevier, vol. 42(3-5), pages 631-639, May.
  4. Jackson, Matthew O. & Kalai, Ehud, 1997. "Social Learning in Recurring Games," Games and Economic Behavior, Elsevier, vol. 21(1-2), pages 102-134, October.
  5. Jehiel, Philippe, 2005. "Analogy-based expectation equilibrium," Journal of Economic Theory, Elsevier, vol. 123(2), pages 81-104, August.
  6. Harsanyi, John C, 1995. "Games with Incomplete Information," American Economic Review, American Economic Association, vol. 85(3), pages 291-303, June.
  7. Eric Maskin & John Riley, 2000. "Asymmetric Auctions," Review of Economic Studies, Oxford University Press, vol. 67(3), pages 413-438.
  8. Susan Athey & Philip A. Haile, 2006. "Empirical Models of Auctions," NBER Working Papers 12126, National Bureau of Economic Research, Inc.
  9. Ignacio Esponda, 2008. "Information feedback in first price auctions," RAND Journal of Economics, RAND Corporation, vol. 39(2), pages 491-508.
  10. Riley, John G & Samuelson, William F, 1981. "Optimal Auctions," American Economic Review, American Economic Association, vol. 71(3), pages 381-392, June.
  11. Isa Hafalir & Vijay Krishna, 2008. "Asymmetric Auctions with Resale," American Economic Review, American Economic Association, vol. 98(1), pages 87-112, March.
  12. Philippe Jehiel & Steffen Huck & Tom Rutter, 2007. "Learning Spillover and Analogy-based Expectations: a Multi-Game Experiment," Levine's Bibliography 843644000000000120, UCLA Department of Economics.
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