Information provision in procurement auctions

Available from: 
October 2013
Paper author(s): 
Joaquín Coleff (Universidad del Rosario)
Daniel García (University of Vienna)
Financial Economics

We analyze the optimal provision of information by a buyer who needs a good to be procured through an auction. The buyer has private information about his preferred location on the product space and may reveal it at no cost. Sellers have a positive entry cost and choose locations simultaneously before competing in prices. We characterize the optimal information structure and show that his surplus is maximal with only two sellers. We also show that committing to set up the rules of the auction before entry takes place increases consumer surplus. 


Go back to Theory

Research section: 
Lacea 2013 annual meeting
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