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Information Choice in Auctions

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  • Bobkova, Nina

Abstract

The choice of an auction mechanism influences which object characteristics bidders learn about and whether the object is allocated efficiently. Some object characteristics are valued equally by all bidders and thus are inconsequential for the efficient allocation. Others matter only to certain bidders, and thus determine the bidder with the highest object value. I show that the efficient auction is the second-price auction: it induces bidders to learn exclusively about object characteristics which matter only to them. An independent private value framework arises endogenously.

Suggested Citation

  • Bobkova, Nina, 2021. "Information Choice in Auctions," CEPR Discussion Papers 16832, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:16832
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    References listed on IDEAS

    as
    1. Jacob K. Goeree & Theo Offerman, 2003. "Competitive Bidding in Auctions with Private and Common Values," Economic Journal, Royal Economic Society, vol. 113(489), pages 598-613, July.
    2. Matthew Jackson, 2009. "Non-existence of equilibrium in Vickrey, second-price, and English auctions," Review of Economic Design, Springer;Society for Economic Design, vol. 13(1), pages 137-145, April.
    3. Nicola Persico, 2000. "Information Acquisition in Auctions," Econometrica, Econometric Society, vol. 68(1), pages 135-148, January.
    4. Milgrom, Paul R & Weber, Robert J, 1982. "A Theory of Auctions and Competitive Bidding," Econometrica, Econometric Society, vol. 50(5), pages 1089-1122, September.
    5. Athey, Susan, 2001. "Single Crossing Properties and the Existence of Pure Strategy Equilibria in Games of Incomplete Information," Econometrica, Econometric Society, vol. 69(4), pages 861-889, July.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Information choice; Endogeneous interdependence; Multidimensional auctions; Interdependent values; Accuracy;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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