Signaling in Auctions Among Competitors

52 Pages Posted: 27 Mar 2010

See all articles by Benedikt von Scarpatetti

Benedikt von Scarpatetti

University of Basel

Cédric Wasser

University of Basel - Faculty of Business and Economics

Date Written: December 11, 2009


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

JEL Classification: D44, L13, D43, D82, C72

Suggested Citation

von Scarpatetti, Benedikt and Wasser, Cédric, Signaling in Auctions Among Competitors (December 11, 2009). Available at SSRN: or

Benedikt Von Scarpatetti

University of Basel ( email )

Petersplatz 1
Basel, CH-4003

Cédric Wasser (Contact Author)

University of Basel - Faculty of Business and Economics ( email )

Peter Merian-Weg 6
Basel, 4002


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