Uninformed Bidding in Sequential Auctions

Emmanuel Lorenzon ()

Bordeaux Economics Working Papers from Bordeaux School of Economics (BSE)

Abstract: We consider a private value auction with one-sided incomplete information in which two objects are sold in a sequence of two second-price auctions. Buyers have multi-unit demands and both are asymmetrically informed at the ex-ante stage of the game. One buyer perfectly knows his type and the other is uninformed about his own type. We con-sider interim information acquisition for the uninformed buyer and derive an asymmetric equilibrium which is shown to produce a declining price sequence across both sales. The supermartingale property of the price sequence stems from the uninformed buyer’s incen-tives to gather private information which leads to an aggressive bidding at the first-stage auction.

Keywords: Sequential auctions; Uninformed bidding; Multi-unit demand; Declining price anomaly (search for similar items in EconPapers)
JEL-codes: D44 D82 L86 M37 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-des, nep-gth and nep-mic
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Working Paper: Uninformed Bidding in Sequential Auctions (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:grt:bdxewp:2020-20

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