Template-Type: ReDIF-Paper 1.0
Title: An Efficient Dynamic Mechanism with Covert Information Acquisition
Author-Name: Vitali Gretschko
Author-Email: Vitali.Gretschko@wiwi.uni-muenster.de
Author-Name: Jasmina Simon
Author-Email: Jasmina.Simon@zew.de

Classification-JEL: D44, D82, D83
Keywords: Information acquisition, dynamic auctions, dynamic pivot mechanism

Abstract: We examine a setting of independent private value auctions where bidders can covertly acquire gradual
information about their valuations. We demonstrate that a dynamic pivot mechanism implements the first-best
information acquisition and allocation rule. We apply our results to a commonly used model of auctions
with information acquisition. The bidders are symmetric and information acquisition costs are moderate. Our
analysis shows that the Dutch auction achieves near‐efficiency. That is, the welfare loss is bounded by the
information acquisition cost of a single bidder. In contrast, the English auction may result in greater welfare
losses.


Note: 
Length: 27
Creation-Date: 2024-12
Revision-Date:
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp616
File-Format: application/pdf
Handle: RePEc:bon:boncrc:CRCTR224_2024_616