Decision Sciences
8 years ago

Buyers' knowledge of highest valuation boosts auction revenue to new heights!

SSRN Electronic Journal
First Price Auctions with General Information Structures: Implications for Bidding and Revenue
Dirk Bergemann, Benjamin A. Brooks, Stephen Morris

Paper Summary

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The article explores how different types of information affect auctions. It looks at what happens when bidders don't know their own values and when they do. The study finds that revenue is highest when buyers know who has the highest value but the top buyer only has partial information about others. Revenue is lowest when buyers are unsure if they will win and if they deviate from their bids.