Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/212376 
Year of Publication: 
2017
Series/Report no.: 
Bank of Finland Research Discussion Papers No. 5/2017
Publisher: 
Bank of Finland, Helsinki
Abstract: 
This paper considers equilibrium behavior in a descending price auction with two players that are asymmetrically informed. The "informed" player knows his valuation while the other does not. The uninformed player can acquire information about his valuation with a positive cost during the auction. We assume that the information acquisition activity is covert and we characterize the equilibrium behavior in the setting where players' valuations are independently and identically distributed. We derive the explicit "inverse bid" functions in the case of the uniformly distributed valuations and provide a revenue comparison between the ascending and descending price auctions in this case.
JEL: 
D44
D82
Persistent Identifier of the first edition: 
ISBN: 
978-952-323-149-8
Document Type: 
Working Paper

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