Nina Bobkova (EUI)

“Information Choice in Auctions”

Abstract: Bidders are uncertain about their valuation for an object and choose about which component to learn. Their valuation consists of a common value component (which matters to all bidders) and a private value component (which is relevant only to individual bidders). Learning about a private component yields independent estimates, whereas learning about a common component leads to correlated information between bidders. I identify conditions for the second-price auction, such that bidders only learn about their private component, so an independent private value framework and efficient outcome arises endogenously. In a first-price auction, every robust equilibrium is inefficient under certain conditions.