BID Brown Bag Seminar: An Experiment on Asymmetric Information in First-Price Common-Value Auctions: The Blessed Winner
|Speaker:||Rajiv Sarin, University of Exeter|
|Date: ||Tuesday 20 September 2016|
|Time: ||12.30 - 13.30|
|Location: ||Kolade Teaching Room, Building One|
In common-value auctions bidders have access to public information, and may also hold private information prior to choosing their bids. The literature has predominately focused on the case in which bidders are symmetrically and privately informed, and finds that aggressive bidding such that payoffs are negative is common (the winner’s curse). In practice, bidders
often only have access to public information, and use this information to form (possibly differing) beliefs. In addition a bidder who is not privately informed may also face bidders who are. We examine bidding behaviour of both informed and uninformed bidders, and vary the information structure they face. We find that uninformed bidders underbid dramatically and persistently, while informed bidders tend to overbid. Our results highlight the importance of correctly modelling the information available to bidders.