Interdependent Value Auctions with Insider Information: Theory and Experiment

Publicado en

  • Games and Economic Behavior


  • We develop a model of interdependent value auctions in which two types of bidders compete: insiders, who are perfectly informed about their value, and outsiders, who are informed only about the private component of their value. Because the bidding strategy of outsiders cannot efficiently adjust with that of insiders, the second-price auction is inefficient. The English auction has an equilibrium in which the information outsiders infer from the history of drop-out prices enables them to bid toward attaining efficiency. The presence of insiders has positive impacts on the seller's revenue. A laboratory experiment confirms key theoretical predictions, despite evidence of naive bidding.

fecha de publicación

  • 2019

Líneas de investigación

  • Asymmetric Information Structure
  • English Auction
  • Experiment
  • Interdependent Value Auctions
  • Second-price Auction

Página inicial

  • 218

Última página

  • 237


  • 117


  • C