Should First-Price Auctions Be Transparent?
- (pp. 177-218)
Abstract
We investigate the role of market transparency in repeated first-price auctions. We consider a setting with independent private and persistent values. We analyze three distinct disclosure regimes regarding the bid and award history. In the minimal disclosure regime each bidder only learns privately whether he won or lost the auction. In equilibrium the allocation is efficient and the minimal disclosure regime does not give rise to pooling equilibria. In contrast, in disclosure settings where either all or only the winner's bids are public, an inefficient pooling equilibrium with low revenues exists.Citation
Bergemann, Dirk, and Johannes Hörner. 2018. "Should First-Price Auctions Be Transparent?" American Economic Journal: Microeconomics, 10 (3): 177-218. DOI: 10.1257/mic.20160278Additional Materials
JEL Classification
- D44 Auctions
- D82 Asymmetric and Private Information; Mechanism Design
- D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
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