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29.11. BGSE Micro Workshop: Nina Bobkova

BGSE Micro Workshop with Nina Bobkova (University of Bonn)

Event details
  • BGSE Workshop
When Nov 29, 2017
from 12:00 to 13:00
Where room 0.017
Contact Name Stephan Lauermann
Contact Email
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Knowing What Matters to Others: Information Selection in Auctions



The valuation of bidders for an object consists of a common value component (which matters to all bidders) and a private value component (which is relevant only to individual bidders). Bidders select about which of these two components they want to acquire noisy information. Learning about a private component yields independent estimates, whereas learning about a common component leads to correlated information between bidders. I show that in a second price auction, information selection in equilibrium is unique. Bidders only learn about their private component, so an independent private value framework arises endogenously. If this were not the case, a bidder could guarantee himself the same expected gain and a strictly lower payment by decreasing correlation in private information. In an all-pay auction, bidders also prefer information about private components. In a first price auction, increasing correlation strictly elevates the payoff for a bidder under certain conditions.

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