CFDP 1764R

Should Auctions be Transparent?


Publication Date: August 2010

Revision Date: September 2014

Pages: 57


We investigate the role of market transparency in repeated first-price auctions. We consider a setting with independent private and persistent values. We analyze three distinct disclosure regimes regarding the bid and award history. In the minimal disclosure regime each bidder only learns privately whether he won or lost the auction. In equilibrium the allocation is efficient and the minimal disclosure regime does not give rise to pooling equilibria. In contrast, in disclosure settings where either all or only the winner’s bids are public, an inefficient pooling equilibrium with low revenues exists.


First price auction, Repeated auction, Private bids, Information revelation

JEL Classification Codes: D44, D82, D83