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Should First-Price Auctions Be Transparent?†

Should First-Price Auctions Be Transparent?† AbstractWe investigate the role of market transparency in repeated first-price auctions. We consider a setting with independent private and persistent values. We analyze three distinct disclosure regimes regarding the bid and award history. In the minimal disclosure regime, each bidder only learns privately whether he won or lost the auction. In equilibrium, the allocation is efficient, and the minimal disclosure regime does not give rise to pooling equilibria. In contrast, in disclosure settings where either all or only the winner’s bids are public, an inefficient pooling equilibrium with low revenues exists. (JEL D44, D82, D83) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Journal: Microeconomics American Economic Association

Should First-Price Auctions Be Transparent?†

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Publisher
American Economic Association
Copyright
Copyright © 2018 © American Economic Association
ISSN
1945-7685
DOI
10.1257/mic.20160278
Publisher site
See Article on Publisher Site

Abstract

AbstractWe investigate the role of market transparency in repeated first-price auctions. We consider a setting with independent private and persistent values. We analyze three distinct disclosure regimes regarding the bid and award history. In the minimal disclosure regime, each bidder only learns privately whether he won or lost the auction. In equilibrium, the allocation is efficient, and the minimal disclosure regime does not give rise to pooling equilibria. In contrast, in disclosure settings where either all or only the winner’s bids are public, an inefficient pooling equilibrium with low revenues exists. (JEL D44, D82, D83)

Journal

American Economic Journal: MicroeconomicsAmerican Economic Association

Published: Aug 1, 2018

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