Private Information in Sequential Common-Value Auctions

Johannes Hörner and Julian Jamison

No 1422, Discussion Papers from Northwestern University, Center for Mathematical Studies in Economics and Management Science

Abstract: We study an infinitely-repeated ?rst-price auction with common values. Initially, bid- ders receive independent private signals about the objects' value, which itself does not change over time. Learning occurs only through observation of the bids. Under one-sided incomplete information, this information is eventually revealed and the seller extracts es- sentially the entire rent (for large discount factors). Both players?payo¤s tend to zero as the discount factor tends to one. However, the uninformed bidder does relatively better than the informed bidder. We discuss the case of two-sided incomplete information, and argue that, under a Markovian re?nement, the outcome is pooling: information is revealed only insofar as it does not affect prices. Bidders submit a common, low bid in the tradition of collusion without conspiracy.

Keywords: repeated game with incomplete information; private information; ratchet effect; first-price auction; dynamic auctions (search for similar items in EconPapers)
JEL-codes: C72 D44 (search for similar items in EconPapers)
Date: 2006-03
New Economics Papers: this item is included in nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.kellogg.northwestern.edu/research/math/papers/1422.pdf main text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nwu:cmsems:1422

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Discussion Papers from Northwestern University, Center for Mathematical Studies in Economics and Management Science Center for Mathematical Studies in Economics and Management Science, Northwestern University, 580 Jacobs Center, 2001 Sheridan Road, Evanston, IL 60208-2014. Contact information at EDIRC.
Bibliographic data for series maintained by Fran Walker ( this e-mail address is bad, please contact ).