Auctions in Markets: Common Outside Options and the Continuation Value Effect

Stephan Lauermann and Gábor Virág ()

American Economic Journal: Microeconomics, 2012, vol. 4, issue 4, 107-30

Abstract: In this paper, we study auctions with outside options provided by future market interaction focusing on the revenue effects of some information revelation policies. We show that auctions with less information revelation may yield higher revenues. In particular, we show that it is never optimal for the auctioneer to reveal information after the auction. Moreover, it is also not optimal to reveal information before the auction unless bidders already have precise information on their own. Our model provides a novel explanation for the prevalence of opaque trading mechanisms, and it offers insights into information sharing in dynamic models of trade. (JEL D44, D83)

JEL-codes: D44 D83 (search for similar items in EconPapers)
Date: 2012
Note: DOI: 10.1257/mic.4.4.107
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/mic.4.4.107 (application/pdf)
http://www.aeaweb.org/aej/mic/app/2012-0035_app.pdf (application/pdf)
Access to full text is restricted to AEA members and institutional subscribers.

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:aea:aejmic:v:4:y:2012:i:4:p:107-30

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Journal: Microeconomics is currently edited by Johannes Hörner

More articles in American Economic Journal: Microeconomics from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().