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Hiding Information in Open Auctions with Jump Bids

Ettinger, David; Michelucci, Fabio (2016), Hiding Information in Open Auctions with Jump Bids, The Economic Journal, 126, 594, p. 1484–1502. 10.1111/ecoj.12243

Type
Article accepté pour publication ou publié
Date
2016
Journal name
The Economic Journal
Volume
126
Number
594
Publisher
Wiley
Pages
1484–1502
Publication identifier
Metadata
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Author(s)
Ettinger, David
Laboratoire d'Economie de Dauphine [LEDa]
Michelucci, Fabio
CERGE-EI
Abstract (EN)
We analyse a rationale for hiding information in open ascending auction formats. We focus on the incentives for a bidder to call a price higher than the highest standing one in order to prevent the remaining active bidders from aggregating more accurate information by observing the exact dropout values of the opponents who exit the auction. We show that the decision whether to allow jump bids or not can have a drastic impact on revenue and efficiency.
Subjects / Keywords
efficiency; jump bids; auctions
JEL
D44 - Auctions
D82 - Asymmetric and Private Information; Mechanism Design