Auctions with Signaling Concerns
Olivier Bos and
No 8650, CESifo Working Paper Series from CESifo
We study a symmetric private value auction with signaling, in which the auction outcome is used by an outside observer to infer the bidders’ types. We elicit conditions under which an essentially unique D1 equilibrium bidding function exists in the second-price auction and the English auction. We establish there is no equivalence between these two auction designs, neither in bidding strategies nor in expected revenue. This is because the presence or absence of an increasing price clock, affects signaling incentives differently in both auction formats, and thereby also the bidders’ incentives to overbid their types. This leads to a strictly higher expected revenue in the second-price auction than in the English auction. Our analysis is completed by a comparison with other disclosure policies. Applications include art auctions and charity auctions.
Keywords: costly signalling; D1 criterion; social status; art auctions; charity auctions (search for similar items in EconPapers)
JEL-codes: D44 D82 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cul, nep-des, nep-gth and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
Journal Article: Auctions with signaling concerns (2021)
Working Paper: Auctions with Signaling Concerns (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_8650
Access Statistics for this paper
More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().