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Information Revelation in Procurement Auctions with Two‐Sided Asymmetric Information

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  • Nicola Doni
  • Domenico Menicucci

Abstract

A buyer needs to procure a good from one of two 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. Our main result is that the more significant is each supplier's private information on the own cost, the less information the buyer should reveal. We also examine the buyer's incentives to make untruthful announces.

Suggested Citation

  • Nicola Doni & Domenico Menicucci, 2014. "Information Revelation in Procurement Auctions with Two‐Sided Asymmetric Information," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 23(4), pages 952-968, December.
    • Handle: RePEc:bla:jemstr:v:23:y:2014:i:4:p:952-968
    DOI: 10.1111/jems.12075
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    1. Nicola Doni & Domenico Menicucci, 2014. "Information Revelation in Procurement Auctions with Two‐Sided Asymmetric Information," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 23(4), pages 952-968, December.
    2. Doni Nicola & Menicucci Domenico, 2013. "Revenue Comparison in Asymmetric Auctions with Discrete Valuations," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 13(1), pages 429-461, September.
    3. Charles J. Thomas, 2014. "How the Nature of Product Differentiation Affects Procurement Competition," Southern Economic Journal, John Wiley & Sons, vol. 81(2), pages 323-344, October.
    4. Zhuang, Hejun & Popkowski Leszczyc, Peter T.L., 2022. "Optimal seller strategy in overlapping auctions," Journal of Retailing and Consumer Services, Elsevier, vol. 65(C).
    5. Domenico Colucci & Nicola Doni & Vincenzo Valori, 2015. "Information policies in procurement auctions with heterogeneous suppliers," Journal of Economics, Springer, vol. 114(3), pages 211-238, April.

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    More about this item

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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