Signaling in Auctions among Competitors

Benedikt von Scarpatetti () and Cédric Wasser

Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems from Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich

Abstract: We consider a model of oligopolistic firms that have private information about their cost structure. Prior to competing in the market a competitive advantage, i.e., a cost reducing technology, is allocated to a subset of the firms by means of a multi-object auction. After the auction either all bids or only the prices to be paid are revealed to all firms. This provides an opportunity for signaling. Whether there exists an equilibrium in which bids perfectly identify the bidders’ costs generally depends on the type and fierceness of the market competition, the specific auction format, and the bid announcement policy.

Keywords: Auction; Oligopoly; Signaling (search for similar items in EconPapers)
JEL-codes: C72 D43 D44 D82 L13 (search for similar items in EconPapers)
Date: 2010-01
New Economics Papers: this item is included in nep-com, nep-cta and nep-gth
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Citations: View citations in EconPapers (3)

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