DP3675 | Information Revelation and Efficiency in Auctions

Publication Date

20/12/2002

JEL Code(s)

Keyword(s)

Programme Area(s)

Abstract

We study the impact of information revelation on efficiency in auctions. In a constrained-efficient mechanism, i.e. a mechanism that is efficient subject to the incentive-compatibility constraint, any additional information available to bidders increases the expected efficiency of the mechanism. This result cannot be extended to a more general setup: in a second-price sealed-bid auction, revelation of information might lead to efficiency losses.