Auctions with flexible information acquisition

Kyungmin Kim and Youngwoo Koh

Games and Economic Behavior, 2022, vol. 133, issue C, 256-281

Abstract: We consider independent private value auctions in which prior to bidding, each bidder engages in fully flexible information acquisition, choosing not only how much information but also what information to acquire about his value. Focusing on a tractable environment with binary underlying values and posterior-separable information costs, we characterize the unique symmetric equilibrium and investigate the effects of information costs on auction outcomes. We also analyze how the reserve price influences bidders' information-acquisition behavior and study its implications for the seller's expected revenue.

Keywords: Information acquisition; Auctions; Posterior-separable information costs; Concavification (search for similar items in EconPapers)
JEL-codes: C72 D44 D83 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:133:y:2022:i:c:p:256-281

DOI: 10.1016/j.geb.2022.03.005

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