This paper examines the effects of disclosing the actual number of bidders in contests with endogenous stochastic entry. I study a standard all-pay auction in which bidders' valuations are commonly known but their participation decisions private. Each potential bidder has to incur an entry cost...

In government procurement auctions of construction contracts, entrants are typically less informed and bid more aggressively than incumbent firms. This bidding behavior makes them more susceptible to losses affecting their prospect of survival. In April of 2000, the Oklahoma Department of...

Using bid data from 8,000 new and used Chevrolet Corvettes sold on eBay, this paper empirically tests Akerlof's (1970) hypothesis that the used car market is characterized by low quality and informational problems. The hypothesis states that the used market has a higher proportion of low quality...

We consider a moral hazard issue inherent in the equity auctions of assets such as oil & gas leases and corporate takeovers. After the auction, the winning bidder decides whether to make follow-up investments in the acquired asset and makes the equity payment out of the revenue from it according...

Recently emerged, auction theory has become a well-established branch of theoretical economics with important practical applications. As the theory progresses, its basic assumptions become the subject of further investigation and thus new directions emerge. Microeconomics in general and auction...

We analyze a divisible good uniform-price auction that features two groups each with a finite number of identical bidders. Equilibrium is unique, and the relative market power of a group increases with the precision of its private information but declines with its transaction costs. In line with...

We extend Wilson (1979) share auction framework to model the uniform-price US Treasury auction as a two-stage multiple leader-follower game. We then explicitly derive the primary dealer's (follower) strategic choice of bids as a function of its customer's (leader) bids and show that an increase...

In many cases, buyers are not informed about their valuations and rely on experts, who are informed but biased for overbidding. We study auction design when selling to such “advised buyers”. We show that a canonical dynamic auction, the English auction, has a natural equilibrium that...

We experimentally study bidding behavior in sequential first-price procurement auctions where bidders' capacity constraints are private information. Treatment differs in the ex-ante probability distribution of sellers' capacities and in the (exogenous) probability that the second auction is...

This paper discusses the role of secret versus public reserve prices when bidders’ valuations depend positively on the seller’s private signal. A public reserve price is announced before the auction starts, and a secret reserve price is disclosed after the highest bid has been reached. The...