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| Author: | Bergemann, D. Shi, X. Välimäki, J. |
| Title: | Information acquisition in interdependent value auctions |
| Journal: | Journal of the European Economic Association
2009 : MAR, VOL. 7:1, p. 61-89 |
| Index terms: | auctions bidding information costs models |
| Language: | eng |
| Abstract: | In this paper, an auction environment with interdependent values is considered. Each bidder can learn her payoff type through costly information acquisition (henceforth as: i-aqn). The socially optimal decision to get information is contrasted with the equilibrium solution with each agent having to privately bear the cost of i-aqn. In the context of the generalized Vickrey-Clarke-Groves mechanism, it is established that the equilibrium level exceeds the socially optimal level of information with positive interdependence. The individual decisions to i-aqn. are strategic substitutes. The difference btw. the equilibrium and the efficient level of i-aqn. is increasing in the interdependence of the bidders' valuations and decreasing in the number of informed bidders. |
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