Information aggregation in auctions with an unknown number of bidders

Harstad, Ronald M.; Pekec, Aleksandar; Tsetlin, Ilia

doi:10.1016/j.geb.2006.06.002

Cited by 12 publications

(8 citation statements)

References 15 publications

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Section: Related Literaturementioning

confidence: 99%

“…In a double‐auction setting with many goods, Harstad, Pekec, and Tsetlin (2008) and Atakan and Ekmekci (2021) considered the effect of numbers uncertainty on the information aggregation properties of a k th‐price auction (Pesendorfer and Swinkels (1997)). In Harstad, Pekec, and Tsetlin (2008), the distribution of bidders is exogenously given. Harstad, Pekec, and Tsetlin (2008) found that even if the equilibrium strategy is strictly increasing (which aids aggregation), information aggregation fails unless the numbers uncertainty is negligible.…”

Section: Related Literaturementioning

confidence: 99%

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Bidding in Common‐Value Auctions With an Unknown Number of Competitors

Lauermann

Speit²

2023

ECTA

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This paper studies a first‐price common‐value auction in which bidders do not know the number of their competitors. In contrast to the case of common‐value auctions with a known number of rival bidders, the inference from winning is not monotone, and a “winner's blessing” emerges at low bids. As a result, bidding strategies may not be strictly increasing, but instead may contain atoms. Moreover, an equilibrium fails to exist when the expected number of competitors is large and the bid space is continuous. Therefore, we consider auctions on a grid. On a fine grid, high‐signal bidders follow an essentially strictly increasing strategy, whereas low‐signal bidders pool on two adjacent bids on the grid. The solutions of a “communication extension” based on Jackson, Simon, Swinkels, and Zame (2002) capture the equilibrium bidding behavior in the limit, as the grid becomes arbitrarily fine.

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Section: Related Literaturementioning

confidence: 99%

Section: Related Literaturementioning

confidence: 99%

Bidding in Common‐Value Auctions With an Unknown Number of Competitors

Lauermann

Speit²

2023

ECTA

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“…1515 See also Harstad et al (2008) for the effect of an uncertain number of bidders in the large double‐auction setting of Pesendorfer and Swinkels (1997). …”

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A common‐value auction with state‐dependent participation

Lauermann

Wolinsky²

2022

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This paper analyzes a common‐value, first‐price auction with state‐dependent participation. The number of bidders, which is unobservable to them, depends on the true value. For participation patterns with many bidders in each state, the bidding equilibrium may be of a “pooling” type—with high probability, the winning bid is the same across states and is below the ex ante expected value—or of a “partially revealing” type—with no significant atoms in the winning bid distribution and an expected winning bid increasing in the true value. Which of these forms will arise is determined by the likelihood ratio at the top of the signal distribution and the participation across states. We fully characterize this relation and show how the participation pattern determines the extent of information aggregation by the price.

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“… Harstad, Pekec, and Tsetlin () develop a theory for common‐value auctions with uncertainty over the number of bidders.…”

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Information Effects in Uniform Price Multi-Unit Dutch Auctions

Buchanan

Gjerstad

Porter

2016

Southern Economic Journal

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We design a multi-unit descending-price (Dutch) auction mechanism that has applications for resource allocation and pricing problems. We address specific auction design choices by theoretically and experimentally determining optimal information disclosure along two dimensions. Bidders are either informed of the number of bidders in the auction, or know that it is one of two possible sizes; they also either know the number of units remaining for sale or are unaware of how many units have been taken by other bidders. We find that revealing group size decreases bids, and therefore revenue, if units remaining are not shown. When group size is unknown the price also falls if the number of units remaining is revealed. The most efficient and largest revenue outcome occurs when bidders are not provided information on either group size or units remaining. These laboratory results conform to some directional predictions from our theory, although overbidding is common.

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Information aggregation in auctions with an unknown number of bidders

Cited by 12 publications

References 15 publications

Bidding in Common‐Value Auctions With an Unknown Number of Competitors

Bidding in Common‐Value Auctions With an Unknown Number of Competitors

A common‐value auction with state‐dependent participation

Information Effects in Uniform Price Multi-Unit Dutch Auctions

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