Working Paper: CEPR ID: DP3675
Authors: Anna Mikusheva; Konstantin Sonin
Abstract: We study the impact of information revelation on efficiency in auctions. In a constrained-efficient mechanism, i.e. a mechanism that is efficient subject to the incentive-compatibility constraint, any additional information available to bidders increases the expected efficiency of the mechanism. This result cannot be extended to a more general setup: in a second-price sealed-bid auction, revelation of information might lead to efficiency losses.
Keywords: allocative efficiency; auctions; information
JEL Codes: D40; D80
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Information Revelation (D82) | Auction Efficiency (D44) |
| Information Revelation (D82) | Expected Value of the Object to the Winner (D44) |
| Information Revelation (D82) | Efficiency Losses in Second-Price Sealed-Bid Auctions (D44) |