Information concentration in common value environments

Vlad Mares () and Mikhael Shor

Review of Economic Design, 2013, vol. 17, issue 3, 183-203

Abstract: We consider how information concentration affects a seller’s revenue in common value auctions. The common value is a function of $$n$$ random variables partitioned among $$m \le n$$ bidders. For each partition, the seller devises an optimal mechanism. We show that whenever the value function allows scalar sufficient statistics for each player’s signals, the mechanism design problem is well-defined. Additionally, whenever a common regularity condition is satisfied, a coarser partition always reduces revenues. In particular, any merger or collusion among bidders reduces revenue. Copyright Springer-Verlag Berlin Heidelberg 2013

Keywords: Information concentration; Industry concentration; Mechanism design; Common value auctions; D44; L41; C72; D82 (search for similar items in EconPapers)
Date: 2013
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Working Paper: Information Concentration in Common Value Environments (2008)
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DOI: 10.1007/s10058-013-0143-0

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