Hiding information in open auctions
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| Publication date | 2008 |
| Number of pages | 24 |
| Publisher | onbekend: Afdeling Algemene Economie |
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| Abstract |
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. |
| Document type | Working paper |
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