Should Auctions Be Transparent?
60 Pages Posted: 7 Sep 2017
Date Written: August 30, 2017
We 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.
Keywords: First Price Auction, Persistent Values, Transparency, Disclosure, Repeated Auction, Independent Private Value, Information Design
JEL Classification: D44, D47, D82, D83, D84
Suggested Citation: Suggested Citation