Reputational bidding
Reputational bidding
We consider auctions where bidders care about the reputational effects of their bidding and argue that the amount of information disclosed at the end of the auction will influence bidding. We focus on bid disclosure rules that capture all of the realistic cases. We show that bidders distort their bidding in a way that conforms to stylized facts about takeovers/licence auctions. We rank the disclosure rules in terms of their expected revenues and find that, under certain conditions, full disclosure will not be optimal. First‐price and second‐price auctions with price disclosure are not revenue equivalent and we rank them.
auctions, signalling, disclosure
693-710
Giovannoni, Francesco
7fa881db-ea88-4456-9216-fadbacf31c71
Makris, Miltiadis
966df0dc-9caf-409e-9cbe-f2a800cdffda
August 2014
Giovannoni, Francesco
7fa881db-ea88-4456-9216-fadbacf31c71
Makris, Miltiadis
966df0dc-9caf-409e-9cbe-f2a800cdffda
Giovannoni, Francesco and Makris, Miltiadis
(2014)
Reputational bidding.
International Economic Review, 55 (3), .
(doi:10.1111/iere.12067).
Abstract
We consider auctions where bidders care about the reputational effects of their bidding and argue that the amount of information disclosed at the end of the auction will influence bidding. We focus on bid disclosure rules that capture all of the realistic cases. We show that bidders distort their bidding in a way that conforms to stylized facts about takeovers/licence auctions. We rank the disclosure rules in terms of their expected revenues and find that, under certain conditions, full disclosure will not be optimal. First‐price and second‐price auctions with price disclosure are not revenue equivalent and we rank them.
Text
ReputationalbiddingIER_MS24025-3.pdf
- Accepted Manuscript
More information
Accepted/In Press date: 22 November 2013
e-pub ahead of print date: 28 July 2014
Published date: August 2014
Keywords:
auctions, signalling, disclosure
Organisations:
Economics
Identifiers
Local EPrints ID: 375195
URI: http://eprints.soton.ac.uk/id/eprint/375195
ISSN: 0020-6598
PURE UUID: b164573a-b730-4d6a-84cf-e73e526bb26a
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Date deposited: 16 Mar 2015 13:32
Last modified: 14 Mar 2024 19:21
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Contributors
Author:
Francesco Giovannoni
Author:
Miltiadis Makris
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