Paper #671

Títol:

Ignorance promotes competition: An auction model with endogenous private valuations

Autor:

Juan José Ganuza

Data:

Març 2003

Resum:

We study a situation in which an auctioneer wishes to sell an object to one of N risk-neutral bidders with heterogeneous preferences. The auctioneer does not know bidders’ preferences but has private information about the characteristics of the ob ject, and must decide how much information to reveal prior to the auction. We show that the auctioneer has incentives to release less information than would be efficient and that the amount of information released increases with the level of competition (as measured by the number of bidders). Furthermore, in a perfectly competitive market the auctioneer would provide the efficient level of information.

Paraules clau:

Auctions, private values, asymmetric information

Codis JEL:

D44, D82, D83

Àrea de Recerca:

Economia de l'Empresa i Organització Industrial / Microeconomia

Publicat a:

RAND Journal of Economics, 35 (2004), 3, pp. 583-598

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