TY - JOUR
T1 - Efficiency and information aggregation in auctions
AU - Pesendorfer, Wolfgang
AU - Swinkels, Jeroen M.
PY - 2000/6
Y1 - 2000/6
N2 - The tension between allocative efficiency and information aggregation is explored in the context of an auction: k identical objects of unknown quality are auctioned off to n bidders whose tastes affect their valuation of an object of given quality. Bidders receive a signal about the quality of the objects. The k highest bidders get an object and pay a price equal to the k + 1st highest bid. We find conditions under which, in the limit, objects are allocated efficiently to those with the highest tastes, and price converges in probability to the value of an object to the marginal taste type.
AB - The tension between allocative efficiency and information aggregation is explored in the context of an auction: k identical objects of unknown quality are auctioned off to n bidders whose tastes affect their valuation of an object of given quality. Bidders receive a signal about the quality of the objects. The k highest bidders get an object and pay a price equal to the k + 1st highest bid. We find conditions under which, in the limit, objects are allocated efficiently to those with the highest tastes, and price converges in probability to the value of an object to the marginal taste type.
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U2 - 10.1257/aer.90.3.499
DO - 10.1257/aer.90.3.499
M3 - Article
AN - SCOPUS:0000779299
SN - 0002-8282
VL - 90
SP - 499
EP - 525
JO - American Economic Review
JF - American Economic Review
IS - 3
ER -