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Optimal Auctions with Information Acquisition

Optimal Auctions with Information Acquisition,Xianwen Shi

Optimal Auctions with Information Acquisition   (Citations: 6)
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Abstract This paper studies optimal auction design in a private value setting where a seller wants to sell a single object to one of several potential buyers who can each covertly acquire information about their valuations prior to participation. A simple but robust finding is that the buyers’ incentives to acquire information increase as the reserve price moves toward the mean valuation. Thus, a seller who wants to encourage information acquisition should set the reserve price closer to the mean valuation than the standard reserve price in Myerson (1981). We present conditions under which the seller will prefer that the buyers acquire more information, conditions under which standard auctions with an adjusted reserve price are optimal, and conditions under which the buyers will acquire socially excessive information in standard auctions. These results are obtained in a general setting with rotation-ordered information structures and continuous information acquisition. Keywords: optimal auctions, information acquisition, informational eciency, rotation order,
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    • ...an early version of the paper (Shi (2007)) for a set of sucient conditions under which the rst-order approach is...
    • ...In an early version of this paper (Shi (2007)), we provide several...

    Xianwen Shiy. Optimal auctions with information acquisition

    • ...More recently, Shi (2006) has studied information acquisition in optimal auctions showing how the optimal reserve price is affected by the fact that information is endogenous...
    • ...In contrast to Shi (2006), this paper derives more general statistical foundations in terms of experiment structures that induce the desired ordering in the ex ante distribution of conditional expectations...
    • ...One such application, already pursued by Shi (2006), is the study of optimal auctions with endogenous information (see Myerson, 1981 for the case of exogenous information)...

    Dezsö Szalay. Contracts with endogenous information

    • ...^b21 = plqVl + ph(1 ¡ q) 2^ …2eVh plq + ph(1 ¡ q)2^ …2e ; (33)...

    Guoqiang Tianet al. Endogenous Information Acquisition on Opponents' Valuations in Multidi...

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