Reputational Bidding

Francesco Giovannoni*, Miltiadis Makris

*Corresponding author for this work

Research output: Contribution to journalArticle (Academic Journal)peer-review

4 Citations (Scopus)

Abstract

We consider auctions where bidders care about the reputational effects of their bidding and argue that the amount of information disclosed at the end of the auction will influence bidding. We focus on bid disclosure rules that capture all of the realistic cases. We show that bidders distort their bidding in a way that conforms to stylized facts about takeovers/licence auctions. We rank the disclosure rules in terms of their expected revenues and find that, under certain conditions, full disclosure will not be optimal. First-price and second-price auctions with price disclosure are not revenue equivalent and we rank them.

Original languageEnglish
Pages (from-to)693-710
Number of pages18
JournalInternational Economic Review
Volume55
Issue number3
DOIs
Publication statusPublished - Aug 2014

Keywords

  • 3RD-GENERATION SPECTRUM-AUCTION
  • STRANGE BIDS
  • BEHAVIOR
  • MARKET

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