Optimal Information Disclosure in Classic Auctions-Reference-Cited by-同舟云学术

Optimal Information Disclosure in Classic Auctions

Published:2022-09-01 Issue:3 Volume:4 Page:371-388
ISSN:2640-205X
Container-title:American Economic Review: Insights
language:en
Short-container-title:American Economic Review: Insights

Author:

Bergemann Dirk¹,Heumann Tibor²,Morris Stephen³,Sorokin Constantine⁴,Winter Eyal⁵

Affiliation:

1. Yale University (email: )

2. Pontificia Universidad Católica de Chile (email: )

3. Massachusetts Institute of Technology (email: )

4. Glasgow University and Higher School of Economics (email: )

5. Hebrew University of Jerusalem and Lancaster University (email: )

Abstract

We characterize the revenue-maximizing information structure in the second-price auction. The seller faces a trade-off: more information improves the efficiency of the allocation but creates higher information rents for bidders. The information disclosure policy that maximizes the revenue of the seller is to fully reveal low values (where competition is high) but to pool high values (where competition is low). The size of the pool is determined by a critical quantile that is independent of the distribution of values and only dependent on the number of bidders. We discuss how this policy provides a rationale for conflation in digital advertising. (JEL D44, D82, D83, M37)

Publisher

American Economic Association

Subject

Management, Monitoring, Policy and Law,Geography, Planning and Development

Link

https://pubs.aeaweb.org/doi/pdf/10.1257/aeri.20210504

Reference27 articles.

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3. Bergemann, Dirk, Tibor Heumann, and Stephen Morris. 2021. "Selling Impressions: Ef ciency vs. Competition." Cowles Foundation Discussion Paper 2291.

4. Bergemann, Dirk, Tibor Heumann, Stephen Morris, Constantine Sorokin, and Eyal Winter. 2021. "Selling Impressions: Ef ciency vs. Competition." Cowles Foundation Discussion Paper 2300.

5. Information structures in optimal auctions

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