First Price Auctions with General Information Structures: Implications for Bidding and Revenue

Dirk Bergemann, Benjamin Brooks and Stephen Morris

No 11782, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We explore the impact of private information in sealed-bid first-price auctions. For a given symmetric and arbitrarily correlated prior distribution over values, we characterize the lowest winning-bid distribution that can arise across all information structures and equilibria. The information and equilibrium attaining this minimum leave bidders indifferent between their equilibrium bids and all higher bids. Our results provide lower bounds for bids and revenue with asymmetric distributions over values. We also report further characterizations of revenue and bidder surplus including upper bounds on revenue. Our work has implications for the identification of value distributions from data on winning bids and for the informationally robust comparison of alternative bidding mechanisms.

Keywords: First-price auction; Information structure; Bayes correlated equilibrium; Private values; Interdependent values; Common values; Revenue; Surplus; Welfare bounds; Reserve price (search for similar items in EconPapers)
JEL-codes: C72 D44 D82 D83 (search for similar items in EconPapers)
Date: 2017-01
New Economics Papers: this item is included in nep-gth and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (78)

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Related works:
Journal Article: First‐Price Auctions With General Information Structures: Implications for Bidding and Revenue (2017)
Working Paper: First Price Auctions with General Information Structures: Implications for Bidding and Revenue (2016)
Working Paper: First Price Auctions with General Information Structures: Implications for Bidding and Revenue (2016)
Working Paper: First Price Auctions with General Information Structures: Implications for Bidding and Revenue (2015)
Working Paper: First Price Auctions with General Information Structures: Implications for Bidding and Revenue (2015)
Working Paper: First Price Auctions with General Information Structures: Implications for Bidding and Revenue (2015)
Working Paper: First Price Auctions with General Information Structures: Implications for Bidding and Revenue (2015)
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