4 research outputs found
On the Informational Inefficiency of Discriminatory Price Auctions
Get PDFWe analyze bidding behavior in large discriminatory price auctions where the number of objects is a non-trivial proportion of the number of bidders. Bidders observe private signals that are affiliated with the common value. We show that the average price in the auction is biased downward from the expected value of the objects, even in the competitive limit. In particular, we show that conditional on relatively low signals, bidders bid the expected value of the objects conditional on their information and winning; while bids at higher signals
flatten out and are below the expected value conditional on winning
On the informational inefficiency of discriminatory price auctions
No full textWe analyze bidding behavior in large discriminatory-price auctions in a common value setting
where the number of objects is a non-trivial proportion of the number of bidders. We show that the
average price paid in the auction is biased downward from the expected value of the objects, even in
the competitive limit.We show that conditional on a signal that falls below a threshold, a bidder bids
no more than the expected value of an object conditional on the signal and winning; while conditional
on any signal that lies above the threshold the bid is strictly lower than the expected value conditional
on the signal and winning
On the informational inefficiency of discriminatory price auctions
No full textWe analyze bidding behavior in large discriminatory-price auctions in a common value setting
where the number of objects is a non-trivial proportion of the number of bidders. We show that the
average price paid in the auction is biased downward from the expected value of the objects, even in
the competitive limit.We show that conditional on a signal that falls below a threshold, a bidder bids
no more than the expected value of an object conditional on the signal and winning; while conditional
on any signal that lies above the threshold the bid is strictly lower than the expected value conditional
on the signal and winning
