Ignorance promotes competition: An auction model with endogenous private valuations

Juan-José Ganuza

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: We study a situation in which an auctioneer wishes to sell an object to one of N risk-neutral bidders with heterogeneous preferences. The auctioneer does not know bidders’ preferences but has private information about the characteristics of the ob ject, and must decide how much information to reveal prior to the auction. We show that the auctioneer has incentives to release less information than would be efficient and that the amount of information released increases with the level of competition (as measured by the number of bidders). Furthermore, in a perfectly competitive market the auctioneer would provide the efficient level of information.

Keywords: Auctions; private values; asymmetric information (search for similar items in EconPapers)
JEL-codes: D44 D82 D83 (search for similar items in EconPapers)
Date: 2003-03
New Economics Papers: this item is included in nep-com and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Related works:
Working Paper: Ignorance Promotes Competition: an Auction Model with Endogenous Private Valuations (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:671

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