Incentive Auctions and Information Revelation
Posted: 13 Mar 2000
We study an incentive auction in which multiple principals bid for the exclusive services, or effort, of a single agent. Each principal has private information about her valuation for these services, and the agent has private information about his disutility of providing them. We characterize the equilibrium of this auction and examine the agent's incentives to reveal information about his type. We show that the effort level taken by the agent is smaller than in the standard auction for a known agent type and greater than in the single-principal, single-agent model.
JEL Classification: D44, D82
Suggested Citation: Suggested Citation