Paper #671

Título:

Ignorance promotes competition: An auction model with endogenous private valuations

Autor:

Juan José Ganuza

Data:

Marzo 2003

Resumen:

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.

Palabras clave:

Auctions, private values, asymmetric information

Códigos JEL:

D44, D82, D83

Área de investigación:

Economía de la Empresa y Organización Industrial / Microeconomía

Publicado en:

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

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