City Research Online

Abstract

We consider a single-item, independent private value auction environment with two bidders: a leader, who knows his valuation, and a follower, who privately chooses how much to learn about his valuation. We show that, under some conditions, an ex-post efficient revenue-maximizing auction—which solicits bids sequentially—partially discloses the leader's bid to the follower, to influence his learning. The disclosure rule that emerges is novel; it may reveal to the follower only a pair of bids to which the leader's actual bid belongs. The identified disclosure rule, relative to the first-best, induces the follower to learn less when the leader's valuation is low and more when the leader's valuation is high.

Publication Type:	Article
Additional Information:	© Elsevier 2017. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/
Publisher Keywords:	Information disclosure, Conjugate disclosure, Bayesian persuasion
Subjects:	H Social Sciences > HB Economic Theory
Departments:	School of Policy & Global Affairs > Economics
SWORD Depositor:	Symplectic Administrator

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