Efficiency in Optimal Auctions with Common Uncertainty

Lester Kwong ()

No 502, Working Papers from Brock University, Department of Economics

Abstract: This paper considers optimal auctions where individuals' valuations have both a private and common value component. We show that when the set of potential buyers and seller are symmetrically uninformed regarding the common value component, it may be socially optimal not to resolve this common uncertainty. Under the sufficient conditions provided to generate this outcome, efficiency will be restored in the optimal auction.

Keywords: Auctions; Efficiency; Common value; Uncertainty (search for similar items in EconPapers)
JEL-codes: D44 D82 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2005-01, Revised 2005-05
New Economics Papers: this item is included in nep-mic
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