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Auctions with Signaling Concerns

Olivier Bos and Tom Truyts

MPRA Paper from University Library of Munich, Germany

Abstract: 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 four auction formats: first-price, second-price, all-pay and the English auction. We obtain a strict ranking in terms of expected revenues: the first-price and all-pay auctions dominate the English auction but are dominated by the second-price auction.

Keywords: Costly signaling; 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-gth and nep-mic
Date: 2017
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