Optimal auctions with externalities and signaling
Jozsef Molnar () and
Gabor Virag ()
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Gabor Virag: Department of Economics, Princeton University
No 112, CERS-IE WORKING PAPERS from Institute of Economics, Centre for Economic and Regional Studies
This paper asks how to design a revenue-maximizing auction in the presence of post-auction market competition and asymmetric information. In this situation, bidders, depending on the auction mechanism, can signal their type through their bidding behavior which influences the outcome of the post-auction market game. Thus the auctioneer has to design a mechanism that not only specifies who wins the good but also describes the amount of information that can be revealed about the winer through signaling. This paper shows that to reveal all information about the winner can be optimal under some conditions.
Pages: 51 pages
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Persistent link: https://EconPapers.repec.org/RePEc:has:discpr:0112
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