Learning Rival¡¯s Information in Interdependent Value Auctions

Jinwoo Kim () and Youngwoo Koh ()

Working Paper Series from Institute of Economic Research, Seoul National University

Abstract: We study a simple auction model with interdependent values in which bidders can learn their rival¡¯s information and compete in the first-price or second-price auction. We characterize unique symmetric equilibrium strategies-both learning and bidding strategies-for the two auction formats. While bidders learn rival¡¯s signals with higher probabilities in the first-price auction, they earn higher rent in the second-price auction. We also show that when learning cost is small, signal correlation is low, or value interdependence is weak, the first-price auction generates a higher revenue than the second-price auction, while the revenue ranking is reversed otherwise.

Date: 2017-09
References: Add references at CitEc
Citations:

Downloads: (external link)
https://ier.snu.ac.kr/activity/working-papers?md=download&seqidx=13

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:snu:ioerwp:no113

Access Statistics for this paper

More papers in Working Paper Series from Institute of Economic Research, Seoul National University Contact information at EDIRC.
Bibliographic data for series maintained by Hojung Lee ().