DP3675 Information Revelation and Efficiency in Auctions
Author(s): | Anna Mikusheva, Konstantin Sonin |
Publication Date: | December 2002 |
Keyword(s): | allocative efficiency, auctions, information |
JEL(s): | D40, D80 |
Programme Areas: | Industrial Organization |
Link to this Page: | cepr.org/active/publications/discussion_papers/dp.php?dpno=3675 |
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.