- Hiding information in open auctions
- Number of pages
- onbekend: Afdeling Algemene Economie
- Document type
- Working paper
- Faculty of Economics and Business (FEB)
- Amsterdam School of Economics Research Institute (ASE-RI)
The defining characteristic of an open format is that it allows to aggregate extra information on top of the one that is available ex-ante. This paper shows that bidders may have an incentive to strategically manipulate this extra flow of information by employing jump bids.
We show that jump bidding can have a dramatic impact on equilibrium behavior and affect revenues and efficiency in an ambiguous manner. Contrary to the common belief that jump bids are anti-competitive, it may also result in higher revenues and efficiency.
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