Efficiency in Optimal Auctions with Common Uncertainty

This paper considers optimal auctions where individuals' valuations have both a private and common value component. We show that when the set of potential buyers and seller are symmetrically uninformed regarding the common value component, it may be socially optimal not to resolve this common uncertainty. Under the sufficient conditions provided to generate this outcome, efficiency will be restored in the optimal auction.

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Year of publication:	2005-01
Authors:	Kwong, Lester M.K.
Institutions:	Department of Economics, Brock University
Subject:	Auctions \| Efficiency \| Common value \| Uncertainty

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Extent:	application/pdf
Series:	Working Papers.
Type of publication:	Book / Working Paper
Notes:	Number 0502 20 pages
Classification:	D44 - Auctions ; D82 - Asymmetric and Private Information
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005168872