Auctions with flexible information acquisition

Kyungmin Kim; Youngwoo Koh

doi:10.1016/j.geb.2022.03.005

Auctions with flexible information acquisition

Kyungmin Kim
, Youngwoo Koh^*

^*Corresponding author for this work

Department of Economics

Research output: Contribution to journal › Article › peer-review

3 Citations (Scopus)

Abstract

We consider independent private value auctions in which prior to bidding, each bidder engages in fully flexible information acquisition, choosing not only how much information but also what information to acquire about his value. Focusing on a tractable environment with binary underlying values and posterior-separable information costs, we characterize the unique symmetric equilibrium and investigate the effects of information costs on auction outcomes. We also analyze how the reserve price influences bidders' information-acquisition behavior and study its implications for the seller's expected revenue.

Original language	English
Pages (from-to)	256-281
Number of pages	26
Journal	Games and Economic Behavior
Volume	133
DOIs	https://doi.org/10.1016/j.geb.2022.03.005
Publication status	Published - 2022 May

Bibliographical note

Publisher Copyright:
© 2022 Elsevier Inc.

Keywords

Auctions
Concavification
Information acquisition
Posterior-separable information costs

ASJC Scopus subject areas

Finance
Economics and Econometrics

Access to Document

10.1016/j.geb.2022.03.005

Cite this

@article{430c4f312eea40018efac6eb34ea8dcc,

title = "Auctions with flexible information acquisition",

abstract = "We consider independent private value auctions in which prior to bidding, each bidder engages in fully flexible information acquisition, choosing not only how much information but also what information to acquire about his value. Focusing on a tractable environment with binary underlying values and posterior-separable information costs, we characterize the unique symmetric equilibrium and investigate the effects of information costs on auction outcomes. We also analyze how the reserve price influences bidders' information-acquisition behavior and study its implications for the seller's expected revenue.",

keywords = "Auctions, Concavification, Information acquisition, Posterior-separable information costs",

author = "Kyungmin Kim and Youngwoo Koh",

note = "Publisher Copyright: {\textcopyright} 2022 Elsevier Inc.",

year = "2022",

month = may,

doi = "10.1016/j.geb.2022.03.005",

language = "English",

volume = "133",

pages = "256--281",

journal = "Games and Economic Behavior",

issn = "0899-8256",

publisher = "Academic Press Inc.",

}

TY - JOUR

T1 - Auctions with flexible information acquisition

AU - Kim, Kyungmin

AU - Koh, Youngwoo

PY - 2022/5

Y1 - 2022/5

N2 - We consider independent private value auctions in which prior to bidding, each bidder engages in fully flexible information acquisition, choosing not only how much information but also what information to acquire about his value. Focusing on a tractable environment with binary underlying values and posterior-separable information costs, we characterize the unique symmetric equilibrium and investigate the effects of information costs on auction outcomes. We also analyze how the reserve price influences bidders' information-acquisition behavior and study its implications for the seller's expected revenue.

AB - We consider independent private value auctions in which prior to bidding, each bidder engages in fully flexible information acquisition, choosing not only how much information but also what information to acquire about his value. Focusing on a tractable environment with binary underlying values and posterior-separable information costs, we characterize the unique symmetric equilibrium and investigate the effects of information costs on auction outcomes. We also analyze how the reserve price influences bidders' information-acquisition behavior and study its implications for the seller's expected revenue.

KW - Auctions

KW - Concavification

KW - Information acquisition

KW - Posterior-separable information costs

UR - https://www.scopus.com/pages/publications/85128316456

U2 - 10.1016/j.geb.2022.03.005

DO - 10.1016/j.geb.2022.03.005

M3 - Article

AN - SCOPUS:85128316456

SN - 0899-8256

VL - 133

SP - 256

EP - 281

JO - Games and Economic Behavior

JF - Games and Economic Behavior

ER -

Auctions with flexible information acquisition

Abstract

Bibliographical note

Keywords

ASJC Scopus subject areas

Access to Document

Other files and links

Fingerprint

Cite this