Information disclosure in auctions with downstream competition

Justin Burkett

Economics Letters, 2018, vol. 163, issue C, 22-26

Abstract: When bidders’ valuations are derived from a downstream market in which they may compete, the allocation to the firms with the lowest costs can differ from the allocation that maximizes the ex post valuations of the bidders. I consider the problem of auctioning two goods to bidders whose valuations for a good flexibly depend on their and their rival’s costs as well as the identity of the rival. I show that revealing the identities of winners through a sequential auction procedure leads to allocations in which bidders tend to have higher ex post valuations but also higher costs when compared to a simultaneous auction.

Keywords: Auctions; Externalities; Downstream competition; Multi-unit (search for similar items in EconPapers)
JEL-codes: D43 D44 D47 D82 (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:163:y:2018:i:c:p:22-26

DOI: 10.1016/j.econlet.2017.11.024

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