Information Acquisition During a Descending Price Auction with Asymmetrically Informed Players

Download or read book Information Acquisition During a Descending Price Auction with Asymmetrically Informed Players written by Paavo Miettinen and published by . This book was released on 2017 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper considers equilibrium behavior in a descending price auction with two players that are asymmetrically informed. The "informed" player knows his valuation while the other does not. The uninformed player can acquire information about his valuation with a positive cost during the auction. We assume that the information acquisition activity is covert and we characterize the equilibrium behavior in the setting where players' valuations are independently and identically distributed. We derive the explicit "inverse bid" functions in the case of the uniformly distributed valuations and provide a revenue comparison between the ascending and descending price auctions in this case.