Repeated Common Value Auctions (original) (raw)
Related papers
Private Information In Repeated Auctions
Levine's Bibliography, 2003
We study an infinitely repeated two-player game with incomplete information, where the stage game is a first-price auction with pure common values. Before playing, the bidders receive affiliated private signals about the value, which itself does not change over time. Items sold in such an auction environment include bonds, wine, neighboring oil tracts, and wholesale fish. In this setting, learning occurs only through observation of the bids. We show that in the case of one-sided incomplete information, this information is eventually revealed and the seller extracts essentially the entire rent (for large enough discount factors). In contrast, the unique equilibrium with patient players under two-sided incomplete information is purely pooling: no information is ever revealed. In the special case with only two types of each bidder, we are able to fully characterize the equilibrium for all values of the discount factor and all priors. 1 information, even when their estimate is high, and prefer to win half of the time at such a low price, rather than break the tie in their favor and divulge thereby some of their information.
Private Information in Sequential Common-Value Auctions
Discussion Papers, 2006
We study an in…nitely-repeated …rst-price auction with common values. Initially, bidders receive independent private signals about the objects' value, which itself does not change over time. Learning occurs only through observation of the bids. Under one-sided incomplete information, this information is eventually revealed and the seller extracts essentially the entire rent (for large discount factors). Both players'payo¤s tend to zero as the discount factor tends to one. However, the uninformed bidder does relatively better than the informed bidder. We discuss the case of two-sided incomplete information, and argue that, under a Markovian re…nement, the outcome is pooling: information is revealed only insofar as it does not a¤ect prices. Bidders submit a common, low bid in the tradition of "collusion without conspiracy". the managing editor, two anonymous referees, and seminar participants at Northwestern and several conferences (CETC, SED, NASMES, ESEM) for useful feedback, as well as Marcin Peski for research assistance.
How to Win Twice at an Auction. On the Incidence of Commissions in Auction Markets
SSRN Electronic Journal, 2000
We analyze the welfare consequences of an increase in the commissions charged by intermediaries in auction markets. We argue that while commissions are similar to taxes imposed on buyers and sellers the question of incidence deserves a new treatment in auction markets. We show that an increase in commissions makes sellers worse o¤, but buyers may strictly gain. The results are therefore strikingly di¤erent from the standard result that all consumers weakly lose after a tax or a commission increase. Our results are useful for evaluating compensation in price …xing conspiracies; in particular they suggest that the method used to distribute compensations in the class action against auction houses Christie's and Sotheby's was misguided.
The Aliation Eect in First-Price Auctions
We study the monotonicity of the equilibrium bid with respect to the number of bidders n in aliated private value models of first-price sealed-bid auctions and prove the existence of a large class of such models in which the equilibrium bid function is not increasing in n. We moreover decompose the eect of a change in n on the bid level into a competition eect and an aliation eect . The latter suggests to the winner of the auction that competition is less intense than she had thought before the auction. Since the aliation eect can occur in both private and common value models, a negative relationship between the bid level and n does not allow one to distinguish between the two models and is also not necessarily (only) due to bidders taking account of the winner's curse.
The Consequences of Information Revealed in Auction
2002
This paper considers the ramifications of post-auction competition on bidding behavior under different bid announcement policies. In equilibrium, the auctioneer's announcement policy has two distinct effects. First, announcement entices players to signal information to their post-auction competitors through their bids. Second, announcement can lead to greater bidder participation in certain instances while limiting participation in others. Specifically, the participation effect works against the signalling effect, thus reducing the impact of signalling found in other papers. Revenue, efficiency, and surplus implications of various announcement policies are examined. * We would like to thank Jim Anton for many helpful comments. Special thanks is also owed to S. Viswanathan, Laurie Hodrick, Robert C. Marshall, Herve Moulin, and Dan Graham for guidance and support. Thank you also to Larry Ausubel, and participants in our Econometric Society seminar. An earlier version of this paper can be found in Rhodes-Kropf's dissertation, 1997.
2015
A long-term auctioneer who repeatedly sells identical or similar items might disclose selective information about past bidding. We present an experimental design to evaluate the revenue implications of two common policies: disclosure of all past bids versus winning bids only. The analysis of our data points out that disclosing winning bids dominates in terms of revenue generation. We propose that when presented historical winning bids some of the bidders mistakenly best-respond to that distribution, failing to realize that winning bids are not representative of all bids. In the steady state, this selection bias results in higher auction revenues relative to when all bids are presented. On the theory side, the findings challenge the predictive power of Bayesian Nash Equilibrium based on rational bidders (that would yield revenue equivalence). On the market design side, they underline the role of historical market information as a key design choice. PRELIMINARY AND INCOMPLETE DRAFT. D...
Repeated Auctions with the Right of First Refusal
The B.E. Journal of Theoretical Economics, 2000
This paper characterizes a set of Nash equilibria in a first-price sealed-bid repeated auction with the right of first refusal using two bidders and asymmetric information regarding the bidders' value distributions. When contract value is constant from one auction to the next and winners' values are publicized, agents retain the value of incumbency and bids are identical to one-shot auctions. When each agents' contract values are random across auctions, agents choose to bid away the full expected value of incumbency, providing a measure of the value of information in this context.