Abstract
We explore the link between informativeness of signals, stochastic dominance and equilibrium bids in a multi-unit auction with risk averse bidders. We show that for a particular class of signal distributions, informativeness is related to conditional first-order stochastic dominance, so that a higher degree of informativeness in the signal-fundamental distribution induces higher bids and therefore higher revenues. Our framework is relevant for discussing total revenues and informativeness in US Treasury auctions.
Original language | English |
---|---|
Journal | Economics Letters |
Volume | 153 |
Pages (from-to) | 80-82 |
Number of pages | 3 |
ISSN | 0165-1765 |
DOIs | |
Publication status | Published - 1 Apr 2017 |
Externally published | Yes |
Keywords
- Common value auctions
- Informativeness
- Stochastic dominance