Linkage Principle, Multi-Dimensional Signals and Blind Auctions

12 Pages Posted: 18 Sep 2003

See all articles by Thierry Foucault

Thierry Foucault

HEC Paris - Finance Department

Stefano Lovo

HEC Paris - Finance Department

Date Written: August 2003

Abstract

We compare the seller's expected revenue in a second price sealed bid auction for a single object in which bidders receive multidimensional signals. Bidders' valuations for the object depend on their signals and a signal observed privately by the seller. We show in various examples that the seller can be better off not revealing publicly his signal. Hence the linkage principle does not necessarily hold when bidders receive multidimensional signals.

Keywords: Auction Theory, Linkage Principle, Multidimensional Signals, Blind Auctions

JEL Classification: D44

Suggested Citation

Foucault, Thierry and Lovo, Stefano, Linkage Principle, Multi-Dimensional Signals and Blind Auctions (August 2003). Available at SSRN: https://ssrn.com/abstract=446682 or http://dx.doi.org/10.2139/ssrn.446682

Thierry Foucault (Contact Author)

HEC Paris - Finance Department ( email )

1 rue de la Liberation
Jouy-en-Josas Cedex, 78351
France
(33)139679569 (Phone)
(33)139677085 (Fax)

HOME PAGE: http://thierryfoucault.com/

Stefano Lovo

HEC Paris - Finance Department ( email )

1 rue de la Liberation
Jouy-en-Josas Cedex, 78351
France

Register to save articles to
your library

Register

Paper statistics

Downloads
93
rank
262,867
Abstract Views
914
PlumX Metrics