Hiding Information in Open Auctions with Jump Bids

David Ettinger (1) , Fabio Michelucci (2)

1 LEDa - Laboratoire d'Economie de Dauphine
2 CERGE-EI

We analyse a rationale for hiding information in open ascending auction formats. We focus on the incentives for a bidder to call a price higher than the highest standing one in order to prevent the remaining active bidders from aggregating more accurate information by observing the exact drop out values of the opponents who exit the auction. We show that the decision whether to allow jump bids or not can have a drastic impact on revenue and efficiency.

Mots clés: Auction; jump bids; efficiency; revenue

Domaines: Economies et finances

David Ettinger, Fabio Michelucci. Hiding Information in Open Auctions with Jump Bids. The Economic Journal, 2016, 126 (594), pp.1484 - 1502. ⟨10.1111/ecoj.12243⟩. ⟨hal-01432853⟩