THE INSIDER'S CURSE

Ángel Hernando Veciana () and Michael Tröge
Additional contact information
Ángel Hernando Veciana: Universidad de Alicante
Michael Tröge: ESCP-EAP, París
Authors registered in the RePEc Author Service: Angel Hernando-Veciana ()

Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie)

Abstract: This paper studies an auction model in which one of the bidders, the insider, has better information about a common component of the value of the good for sale, than the other bidders, the outsiders. Our main result shows that the insider may have incentives to disclose her private information if she faces sufficiently strong competition from the outsiders. We also show that the insider can protect the value of her private information by hiding her presence in the auction to the outsiders. Finally, we analyze the implications of information revelation on the efficiency of the auction and on the auctioneer's expected revenue.

Keywords: auctions; asymmetric information; information disclosure (search for similar items in EconPapers)
JEL-codes: D41 D44 D82 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2005-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published by Ivie

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http://www.ivie.es/downloads/docs/wpasad/wpasad-2005-08.pdf Fisrt version / Primera version, 2005 (application/pdf)

Related works:
Journal Article: The insider's curse (2011)
Working Paper: The Insider's Curse (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:ivi:wpasad:2005-08

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