Private value perturbations and informational advantage in common value auctions

Larson, Nathan

doi:10.1016/j.geb.2007.07.010

Cited by 23 publications

(15 citation statements)

References 17 publications

(10 reference statements)

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“…2 In this respect, we propose a tractable model in which bidders differ in the quality of their private information. Other similar models are those by Hernando-Veciana (2004), Larson (2004) and Hernando-Veciana and Tröge (2005) which have been referred to previously, and the model of an independent and simultaneous paper by Boone and Goeree (2005). This last paper differs from ours in that it studies the optimal auction design and does not consider the question of information acquisition.…”

Section: Introductionmentioning

confidence: 70%

“…First, the models of Bergemann and Välimäki (2002) and Hagedorn (2004), in which information acquisition makes the bidder's action more informative with respect to both the common and the bidder's private value simultaneously. Second, the models of Larson (2004) and Hernando-Veciana and Tröge (2005) …”

Section: Discussionmentioning

confidence: 99%

“…For instance, private information acquisition in our model does not decrease the other bidders' bids as in their model. Milgrom (1981), Engelbrecht-Wiggans et al (1983), and Hernando-Veciana (2004) derive some partial results as a by-product, and Larson (2004) and Hernando-Veciana and Tröge (2005) focus on the value of private information. The last two papers differ from ours in that they are restricted to the open auction and to information acquisition about the common value, whereas we also study the sealed bid auction and information acquisition about the private value.…”

Section: Introductionmentioning

confidence: 99%

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Information acquisition in auctions: Sealed bids vs. open bids

Hernando-Veciana

2009

Games and Economic Behavior

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This paper studies the incentives of a bidder to acquire information in an auction when her information acquisition decision is observed by the other bidders before bidding. Our results show that the sealed bid (second price) auction may induce more information acquisition about a common component of the value than the open (English) auction but less about the private component of the value. Moreover, we show that more information about the private value and less information about the common value may improve efficiency and revenue. Consequently, our results suggest new arguments in favor of the open auction.JEL classification: D41; D44; D82

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Section: Introductionmentioning

confidence: 70%

Section: Discussionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Information acquisition in auctions: Sealed bids vs. open bids

Hernando-Veciana

2009

Games and Economic Behavior

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“…18 As stated in Proposition 1, information acquisition is strictly dominant for T >T , and both individuals will acquire information. For T <T , however, if individual 1 acquires information, 2 will remain uninformed, and vice-versa.…”

Section: Extensionsmentioning

confidence: 86%

“…In the context of winner-pay auctions, incentives to acquire information when decisions are observable have been shown to depend on the exact auction format and on whether information is about a private or a common value. An early contribution studying the value of information is Milgrom and Weber (1982); recent work includes Hernando-Veciana (2009), Larson (2009), and Hernando-Veciana and Tröge (2010).…”

Section: Introductionmentioning

confidence: 99%

Volunteering and the strategic value of ignorance

Morath

2012

Soc Choice Welf

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ZUSAMMENFASSUNG Volunteering and the Strategic Value of IgnoranceDie private Bereitstellung öffentlicher Güter ähnelt häufig einem "Zermürbungs-krieg": Die Beteiligten warten, bis sich jemand anderes freiwillig meldet und das öffentliche Gut bereitstellt. Nach einer gewissen Zeitperiode des Wartens kann jedoch ein Beteiligter zufällig dazu bestimmt werden, die Bereitstellung zu übernehmen. Wenn die Beteiligten ihre Bereitstellungskosten nicht genau kennen, sich aber vor dem Bereitstellungsspiel Information über ihre Kosten beschaffen können, dann kommt dieser Information ein strategischer Wert zu; die Beteiligten könnten es vorziehen, ihre Bereitstellungskosten nicht genau zu kennen. Wenn der Zeithorizont des Bereitstellungsspiels hinreichend kurz ist, entscheidet sich im Gleichgewicht lediglich ein Beteiligter, Information zu akquirieren. Bei einem längeren Zeithorizont ist es eine strikt dominante Strategie, sich Information zu beschaffen. Der Zeithorizont stellt ein wichtiges Instrument zur Beeinflussung der Effizienz des Bereitstellungsspiels dar.

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Equilibrium and revenue in a family of common-value first-price auctions with differential information

Malueg

Orzach

2011

Int J Game Theory

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We study a discrete common-value auction environment with two asymmetrically informed bidders. Equilibrium of the first-price auction is in mixed strategies, which we characterize using a doubly recursive solution method. The distribution of bids for the ex post strong player stochastically dominates that for the ex post weak player. This result complements Maskin and Riley's (Rev Econ Stud 67:413-438, 2000) similar result for asymmetric private-value auctions. Finally, comparison with the dominance-solvable equilibrium in a second-price auction shows the MilgromWeber (Econometrica 50: 1089-1122, 1982a) finding that the second-price auction yields at least as much revenue as the first-price auction fails with asymmetry: in some cases the first-price auction provides greater expected revenue, in some cases less.

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Private value perturbations and informational advantage in common value auctions

Cited by 23 publications

References 17 publications

Information acquisition in auctions: Sealed bids vs. open bids

Information acquisition in auctions: Sealed bids vs. open bids

Volunteering and the strategic value of ignorance

Equilibrium and revenue in a family of common-value first-price auctions with differential information

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