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Title:Private Information in Sequential Common-Value Auctions PDF Logo
Authors:Hörner, Johannes
Jamison, Julian
Issue Date:2006
Series/Report no.:Discussion paper // Center for Mathematical Studies in Economics and Management Science 1422
Abstract:We study an in.nitely-repeated .rst-price auction with common values. Initially, bid-ders receive independent private signals about the objects. value, which itself does not change over time. Learning occurs only through observation of the bids. Under one-sided incomplete information, this information is eventually revealed and the seller extracts es-sentially the entire rent (for large discount factors). Both players.payoþs tend to zero as the discount factor tends to one. However, the uninformed bidder does relatively better than the informed bidder. We discuss the case of two-sided incomplete information, and argue that, under a Markovian re.nement, the outcome is pooling: information is revealed only insofar as it does not aþect prices. Bidders submit a common, low bid in the tradition of .collusion without conspiracy.
Subjects:repeated game with incomplete information
private information
ratchet effect
first-price auction
dynamic auctions
Document Type:Working Paper
Appears in Collections:Discussion Papers, Kellogg School of Management, Northwestern University

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