Information Structures in Optimal Auctions

Dirk Bergemann and Martin Pesendorfer

No 1323, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: A seller wishes to sell an object to one of multiple bidders. The valuations of the bidders are privately known. We consider the joint design problem in which the seller can decide the accuracy by which bidders learn their valuation and to whom to sell at what price. We establish that optimal information structures in an optimal auction exhibit a number of properties: (i) information structures can be represented by monotone partitions, (ii) the cardinality of each partition is finite, (iii) the partitions are asymmetric across agents. These properties imply that the optimal selling strategy of a seller can be implemented by a sequence of exclusive take-it or leave-it offers.

Keywords: Optimal Auction; Private Values; Information Structures; Partitions (search for similar items in EconPapers)
JEL-codes: C72 D44 D82 D83 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2001-09
New Economics Papers: this item is included in nep-ent, nep-gth, nep-mic and nep-net
Note: CFP 1218.
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

Published in Journal of Economic Theory (2007), 137: 580-609

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Related works:
Journal Article: Information structures in optimal auctions (2007)
Working Paper: Information Structures in Optimal Auctions (2001)
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