Nina Bobkova
ABSTRACT
Bidders are uncertain about their valuation for an object and choose about which component to learn. Their valuation consists of a common value component (which matters to all bidders) and a private value component (which is relevant only to individual bidders). Learning about a private component yields independent estimates, whereas learning about a common component leads to correlated information between bidders. I analyze the incentives of bidders to choose information about components in the second-price, the first-price and the all-pay auction. I identify conditions for the second-price auction, such that bidders only learn about their private component: an independent private value framework and an efficient outcome arise endogenously. In a first-price auction, every robust equilibrium is inefficient under certain conditions.
Index Terms
- Information Choice in Auctions
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