DP7023 Information Acquisition During a Descending Auction

Author(s): Achim Wambach
Publication Date: October 2008
Keyword(s): Descending auction, Dutch auction, First price sealed bid auction, Information acquisition
JEL(s): D44, D82, D83
Programme Areas: Industrial Organization
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=7023

If bidders can acquire information during the auction the descending auction is no longer equivalent to a first-price-sealed-bid auction. Revenue equivalence does not hold. The incentive to acquire information can even be larger in a descending auction than in an ascending auction.