Should Auctions Be Transparent?

60 Pages Posted: 7 Sep 2017

See all articles by Dirk Bergemann

Dirk Bergemann

Yale University - Cowles Foundation - Department of Economics; Yale University - Cowles Foundation

Johannes Horner

Yale University - Cowles Foundation

Multiple version iconThere are 4 versions of this paper

Date Written: August 30, 2017

Abstract

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

Bergemann, Dirk and Horner, Johannes, Should Auctions Be Transparent? (August 30, 2017). Cowles Foundation Discussion Paper No. 1764R2. Available at SSRN: https://ssrn.com/abstract=3032393 or http://dx.doi.org/10.2139/ssrn.3032393

Dirk Bergemann (Contact Author)

Yale University - Cowles Foundation - Department of Economics ( email )

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HOME PAGE: http://www.econ.yale.edu/~dirk/

Yale University - Cowles Foundation

Box 208281
New Haven, CT 06520-8281
United States

Johannes Horner

Yale University - Cowles Foundation ( email )

Box 208281
New Haven, CT 06520-8281
United States

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