Abstract

https://ssrn.com/abstract=2444429
 


 



Auctions with Dynamic Costly Information Acquisition


Negin Golrezaei


University of Southern California - Marshall School of Business

Hamid Nazerzadeh


University of Southern California - Marshall School of Business

December 20, 2013


Abstract:     
We study the mechanism design problem for a seller of an indivisible good in a setting where privately informed buyers can acquire additional information and refine their valuations for the good at a cost. For this setting, we propose optimal (revenue-maximizing) and efficient (welfare-maximizing) mechanisms that induce a right level of investment in information acquisition.

We show that because information is costly, in the optimal and even the efficient mechanisms, not all the buyers would obtain the additional information. In fact, these mechanisms incentivize buyers with higher initial valuations to acquire information.

Number of Pages in PDF File: 54

Keywords: dynamic mechanisms, optimal auctions, online advertising, cookie matching, data markets, selling information

JEL Classification: D44


Open PDF in Browser Download This Paper

Date posted: June 2, 2014 ; Last revised: April 26, 2016

Suggested Citation

Golrezaei, Negin and Nazerzadeh, Hamid, Auctions with Dynamic Costly Information Acquisition (December 20, 2013). Available at SSRN: https://ssrn.com/abstract=2444429 or http://dx.doi.org/10.2139/ssrn.2444429

Contact Information

Negin Golrezaei
University of Southern California - Marshall School of Business ( email )
701 Exposition Blvd
Los Angeles, CA 90089
United States

Hamid Nazerzadeh (Contact Author)
University of Southern California - Marshall School of Business ( email )
Bridge Memorial Hall
Los Angeles, CA 90089
United States
HOME PAGE: http://www-bcf.usc.edu/~nazerzad/

Feedback to SSRN


Paper statistics
Abstract Views: 457
Downloads: 110
Download Rank: 197,848