Volume 38, Number 1, 125-135, DOI: 10.1007/s00199-006-0177-4

Revealing information in auctions: the allocation effect

Simon Board

From the issue entitled "Symposium on Auction Theory"

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Abstract

When there are two bidders, releasing independent information in an English auction with private values makes the seller worse off. However, this is no longer true with more bidders: when there is enough competition, revelation benefits the auctioneer. In three examples the dividing case is shown to be three bidders. This allocation effect applies to other standard auctions and parallels the bundling decision in a multi-unit auction.

Keywords  Auctions - Information revelation - Bundling

JEL Classification Numbers  D44 - D82 - L12


I would like to thank Jeremy Bulow, Willie Fuchs, Paul Klemperer, Rob McMillan, Phil Reny, Jeff Zwiebel and especially Andy Skrzypacz. I also grateful to two referees and an Associate Editor for a number of helpful comments.

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