Information acquisition in auctions: Sealed bids vs. open bids

Hernando-Veciana, Ángel

Abstract

This paper studies the incentives of a bidder to acquire information in an auction when her information acquisition decision is observed by the other bidders before bidding. Our results show that the sealed bid (second price) auction may induce more information acquisition about a common component of the value than the open (English) auction but less about the private component of the value. Moreover, we show that more information about the private value and less information about the common value may improve efficiency and revenue. Consequently, our results suggest new arguments in favor of the open auction.

Citation

Hernando-Veciana, Á. (2009). Information acquisition in auctions: Sealed bids vs. open bids. Games and Economic Behavior, 65(2), 372-405. https://doi.org/10.1016/j.geb.2007.10.015

• Journal Article Type: Article
• Online Publication Date: Mar 7, 2008
• Publication Date: 2009-03
• Deposit Date: Jun 15, 2018
• Journal: Games and Economic Behavior
• Print ISSN: 0899-8256
• Electronic ISSN: 1090-2473
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 65
• Issue: 2
• Pages: 372-405
• DOI: https://doi.org/10.1016/j.geb.2007.10.015
• Public URL: https://durham-repository.worktribe.com/output/1328689