 Multidimensional Private Value AuctionsStephen Morris and Hanming Fang Yale School of Management Working Papers from Yale School of Management Abstract: We consider parametric examples of two-bidder private value auctions in which each bidder observes her own private valuation as well as noisy signals about her opponent's private valuation. In such multidimensional private value auction environments, we show that the revenue equivalence between the first and second price auctions breaks down and there is no definite revenue ranking; while the second price auction is always efficient allocatively, the first price auction may be inefficient and the inefficiency may increase as the signal becomes more informative; equilibria may fail to exist for the first price auction. We also show that auction mechanisms provide different incentives for bidders to acquire costly information about opponents' valuation. Keywords: Multidimensional Auctions; Revenue Equivalence; Allocative Efficiency; Information Acquisition (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ysm:somwrk:ysm387 Access Statistics for this paper More papers in Yale School of Management Working Papers from Yale School of Management Contact information at EDIRC. |
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