I want to tell you? Maximizing revenue in first-price two-stage auctions

Galit Ashkenazi-Golan, Yevgeny Tsodikovich and Yannick Viossat
Additional contact information
Galit Ashkenazi-Golan: LSE - London School of Economics and Political Science
Yevgeny Tsodikovich: Bar-Ilan University [Israël], AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique

Post-Print from HAL

Abstract: A common practice in many auctions is to offer bidders an opportunity to improve their bids, known as a best and final offer stage. This improved bid can depend on new information either about the asset or about the competitors. This paper examines the effects of new information regarding competitors, seeking to determine what information the auctioneer should provide assuming the set of allowable bids is discrete. The rational strategy profile that maximizes the revenue of the auctioneer is the one where each bidder makes the highest possible bid that is lower than his valuation of the item. This strategy profile is an equilibrium for a large enough number of bidders, regardless of the information released. We compare the number of bidders needed for this profile to be an equilibrium under different information structures. We find that it becomes an equilibrium with fewer bidders when less additional information is made available to the bidders regarding the competition. It follows that when the number of bidders is a priori unknown, there are some advantages to the auctioneer not revealing information and conducting a one-stage auction instead.

Keywords: Auctions; Multistage auctions; BAFO; Information utilization (search for similar items in EconPapers)
Date: 2023-04-06
New Economics Papers: this item is included in nep-des, nep-gth and nep-mic
Note: View the original document on HAL open archive server: https://amu.hal.science/hal-04099021
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Published in Economic Theory, In press, ⟨10.1007/s00199-023-01498-w⟩

Downloads: (external link)
https://amu.hal.science/hal-04099021/document (application/pdf)

Related works:
Journal Article: I want to tell you? Maximizing revenue in first-price two-stage auctions (2023)
Working Paper: I Want to Tell You? Maximizing Revenue in First-Price Two-Stage Auctions (2021)
Working Paper: I Want to Tell You? Maximizing Revenue in First-Price Two-Stage Auctions (2020)
Working Paper: I Want to Tell You? Maximizing Revenue in First-Price Two-Stage Auctions (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04099021

DOI: 10.1007/s00199-023-01498-w

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().