Publication:
Market selection and the information content of prices

Thumbnail Image

Departments

School / College / Institute

Program

KU Authors

Co-Authors

Ekmekçi, Mehmet

Publication Date

Language

Embargo Status

NO

Journal Title

Journal ISSN

Volume Title

Alternative Title

Abstract

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.

Source

Publisher

Wiley

Subject

Economics, Mathematics, Social sciences, Mathematical methods, Statistics and probability

Citation

Has Part

Source

Econometrica

Book Series Title

Edition

DOI

10.3982/ECTA14935

item.page.datauri

Link

Rights

Copyrights Note

Endorsement

Review

Supplemented By

Referenced By

0

Views

3

Downloads

View PlumX Details