Market Selection and the Information Content of Prices

Autor: Mehmet Ekmekci, Alp E. Atakan
Přispěvatelé: Atakan, Alp Enver (ORCID 0000-0003-3640-187X & YÖK ID 39383), Ekmekçi, Mehmet, College of Administrative Sciences and Economics, Department of Economics
Rok vydání: 2021
Předmět:
Zdroj: Econometrica
ISSN: 0012-9682
DOI: 10.3982/ecta14935
Popis: We study information aggregation when n bidders choose, based on their private information, between two concurrent common-value auctions. There are k(s) identical objects on sale through a uniform-price auction in market s and there are an additional k(r) objects on auction in market r, which is identical to market s except for a positive reserve price. The reserve price in market r implies that information is not aggregated in this market. Moreover, if the object-to-bidder ratio in market s exceeds a certain cutoff, then information is not aggregated in market s either. Conversely, if the object-to-bidder ratio is less than this cutoff, then information is aggregated in market s as the market grows arbitrarily large. Our results demonstrate how frictions in one market can disrupt information aggregation in a linked, frictionless market because of the pattern of market selection by imperfectly informed bidders.
European Research Council (ERC)
Databáze: OpenAIRE