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| Daniel Z. Li |
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| ''Revealing Product Information to Bidders with Differentiated Preferences'' |
| ( 2013, Vol. 33 No.3 ) |
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| We study information disclosure in standard auctions where bidders preferences are horizontally differentiated, whose valuations depend on the matching between the product attribute and their preferences. The seller may reveal product information in the form of partition prior to the auction. Under a symmetric setting, we show in a close-form result that more precise information induces more dispersed distributions of bidders' posterior valuations, which, specifically, are ordered in terms of First Order Stochastic Dominance (FOSD). We also prove that optimal disclosure policy is extreme, in the sense that the seller will reveal either full or no information to the bidders, depending on the number of bidders. |
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| Keywords: Information Disclosure, Auction, Preference Differentiation, Valuation Dispersion |
JEL: D8 - Information, Knowledge, and Uncertainty: General
D4 - Market Structure and Pricing: General |
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| Manuscript Received : Aug 03 2013 | | Manuscript Accepted : Sep 03 2013 |
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