DP3675 Information Revelation and Efficiency in Auctions
|Author(s):||Anna Mikusheva, Konstantin Sonin|
|Publication Date:||December 2002|
|Keyword(s):||allocative efficiency, auctions, information|
|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.