Séminaire NANCY – Oliver Bos (ENS Paris Saclay)

Détails de l'événement :

“Auctions with Signaling Bidders: Optimal Design and Information Disclosure” with Martin Pollrich

Abstract: We study optimal auctions in a symmetric private values setting where biddershave signaling concerns: they care about winning the object and a receivers inference about their type. Signaling concerns arise in various economic situations suchas takeover bidding charity auctions procurement and art auctions. We show thatauction revenue can be decomposed into the standard revenue from the respectiveauction without signaling concern and a signaling component. The latter is thebidders’ ex-ante expected signaling value net of an endogenous outside option: thesignaling value for the lowest type. The revenue decomposition restores revenueequivalence between different auction designs provided that the same informationabout bids is revealed. Revealing information about submitted bids affects revenuevia the endogenous outside option. In general revenue is not monotone in information revelation: revealing more information about submitted bids may reducerevenue. We show that any bid disclosure rule allowing to distinguish whethera bidder submitted a bid or abstained from participation minimizes the outsideoption and therefore maximizes revenue.