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Information Disclosure in Common Value Repeated Auctions
Stéphane Robin  1@  , Nicolas Jacquemet  2, 3@  , Vianney Dequiedt  4@  
1 : Groupe d'analyse et de théorie économique  (GATE Lyon Saint-Étienne)  -  Website
École Normale Supérieure (ENS) - Lyon, Université Lumière - Lyon II, Université Claude Bernard - Lyon I (UCBL), CNRS : UMR5824, Université Jean Monnet - Saint-Etienne, PRES Université de Lyon
93, chemin des Mouilles 69130 Écully --- 6, rue Basse des Rives 42023 Saint-Étienne cedex 02 -  France
2 : Bureau d'économie théorique et appliquée  (BETA)  -  Website
université de Strasbourg, CNRS : UMR7522, Université Nancy II
P E G E 61 avenue de la Forêt Noire 67085 STRASBOURG CEDEX -  France
3 : Paris School of Economics
Université Paris I - Panthéon-Sorbonne
Paris -  France
4 : Centre d'études et de recherches sur le developpement international  (CERDI)  -  Website
CNRS : UMR6587, Université d'Auvergne - Clermont-Ferrand I
65 Bvd Francois Mitterrand - BP 320 63009 CLERMONT FERRAND CEDEX 1 -  France

What is the optimal disclosure policy of a seller in a repeated auction? When identical and common value items are auctioned sequentially, information about the outcome of the elapsed auctions, like the winners bid, changes how the bidders value next item and could impact their bidding strategy. We analyse this issue in a twice repeated common value auction, both in theory and in the lab. We show that when the winning bid is disclosed at the end of the first auction, any symmetric equilibrium of the game necessarily involves some bunching at the top: the strategy profiles in the first auction are at for bidders that receive the highest signals about the value of the object. However, the impact of that information disclosure on the sellers profit cannot be assessed analytically. Therefore, we turn to the lab. We observe that the sellers profit decreases with disclosure of the winning bid compared to the case where no information is disclosed at the end of the first auction. The main reason is that bidders decrease drastically their bids in the first auction when they know that the winning bid will be revealed: an anticipation effect. Moreover and as predicted by theory, bunching occurs for high value signals.

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