Sequential Information Disclosure in Auctions

Dirk Bergemann and Achim Wambach

No 1900R, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: We propose a sequential auction mechanism for a single object in which the seller jointly determines the allocation and the disclosure policy. A sequential disclosure rule is shown to implement an ascending price auction in which each losing bidder learns his true valuation, but the winning bidder's information is truncated from below. As the auction ends, the winning bidder only has limited information, namely that his valuation is sufficiently high to win the auction. The sequential mechanism implements the allocation of the handicap auction of Es� and Szentes [10] but strengthens the participation constraints of the bidders from interim to posterior constraints. Due to the limited disclosure of information, the participation constraints (and incentive constraints) of all the bidders are satisfied with respect to all information revealed by the mechanism. In the special case in which the bidders have no private information initially, the seller can extract the entire surplus.

Keywords: Independent private value auction; Sequential disclosure; Ascending auctions; Information structure; Interim equilibrium; Posterior equilibrium (search for similar items in EconPapers)
JEL-codes: C72 D44 D82 D83 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2013-07, Revised 2014-10
New Economics Papers: this item is included in nep-cta, nep-gth and nep-mic
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Published in Journal of Economic Theory (September 2015), 159, Part B: 1074-1095

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Related works:
Journal Article: Sequential information disclosure in auctions (2015)
Working Paper: Sequential Information Disclosure in Auctions (2013)
Working Paper: Sequential Information Disclosure in Auctions (2013)
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