This paper studies an auction model in which one of the bidders, the insider, has better information about a common component of the value of the good for sale, than the other bidders, the outsiders. Our main result shows that the insider may have incentives to disclose her private information...

We develop a model of information processing and strategy choice for participants in a double auction. Sellers in this model form beliefs that an offer will be accepted by some buyer. Similarly, buyers form beliefs that a bid will be accepted. These beliefs are formed on the basis of observed...

The cost of political campaigns in the U.S. has risen substantially in recent years. For example, real spending on congressional election campaigns doubled between 1976 and 1992 (Steven D. Levitt [1995]). There are many reasons why increased campaign spending might be socially harmful. First,...

We consider an augmented version of the symmetric private value auction model with independent types. The augmentation, intended to illustrate reality, concerns information bidders have about their opponents. To the standard assumption that every bidder knows his type and the distribution of...

We analyze the role resale creates for zero-value bidders, called speculators, in standard auctions with symmetric independent private values buyers. English/second-price auctions always have equilibria with active resale markets and positive profits for a speculator. In first- price/Dutch...

We construct Edgeworth exchange economies equivalent to demand and supply environments typically used in bargaining models and market experiments. This formulation clearly delineates environment, institution, and behavior for these models and experiments. To illustrate, we examine results by...

We investigate differences in bidding behavior and participation patterns between simultaneous and multi-round auction formats held in the state of Oklahoma. Theory suggests there could be differential bidding effects arising from synergies and the release of relevant information across the two...

Suppose that the auctioneer begins at a maximum price, with every bidder knowing her own valuation of the object. Suppose that her valuation exceeds her expectation of the price. Then she might plan to bid more than some linear positive function of the valuation. Such a revision of the Vickrey...

Landberger et al. (2001) identified optimal bidder behavior in first- price private-value auctions when the ranking of valuations is common knowledge, and derived comparative-statics predictions regarding the auctioneer’s expected revenue and the efficiency of the allocation. The experiment...

We analyze first-price auctions with two asymmetric bidders, where the winner can offer the good for resale to the loser. One bidder has a private value for the good, the other bidder - the speculator - has zero value. We show that, independently of the resale market rules, the speculator's...