Economic Theory and Experimental Seminar - Cédric Wasser (University of Bonn)

Room 605, Level 6, 111 Barry Street, Carlton

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Alex Nichifor

nichifor@unimelb.edu.au

T: +61 3 8344 7420

Title: Competitive Information Disclosure to an Auctioneer

Abstract: We analyze how voluntary disclosure of information by bidders affects the outcome of optimally designed auctions. In a single-object auction environment, we assume that before the revenue-maximizing auctioneer chooses the selling mechanism, bidders independently and simultaneously choose signals that reveal information about their privately known valuations. We show that a subgame-perfect equilibrium exists and that in every such equilibrium the object is sold with probability one. Moreover, in all environments where without disclosure the object remains unsold with positive probability, the auctioneer strictly benefits from the disclosure.