Rates of information aggregation in common value auctions
type: Item
instance of: scholarly article
title: Rates of information aggregation in common value auctions
zbMATH Open document ID: 1087.91018
DOI: 10.1016/S0022-0531(03)00224-2
author: Han Hong
author: Matthew Shum
published in: Journal of Economic Theory
publication date: 2004-08-16T00:00:00Z
review text: In the paper, two standard types of auctions are considered: the \(k\)-unit uniform-price auction as in [\textit{W. Pesendorfer} and \textit{J. Swinkels}, Econometrica 65, 1247--1281 (1997; Zbl 0887.90052)] and the single unit irrevocable dropout English auction [\textit{P. Milgrom} and \textit{R. Weber}, Econometrica 50, 1089--1122 (1982; Zbl 0487.90017)]. The authors study uniform-price auctions in which \(k\) identical objects of an unknown value are auctioned off to \(n\) bidders, where \(n\), \(k\) are allowed to diverge to infinity and \(\frac{k}{n}\) converges to a number in \([0,1)\). They show that under the Wilson assumptions [\textit{R.Wilson}, Rev. Econ. Stud. 44, 511--518 (1977; Zbl 0373.90012)] the price aggregates the information at a rate proportional to \(\frac{n}{\sqrt{k}}\) and in the Pesendorfer-Swinkels [loc. cit.] framework that the price is proportional to \(\sqrt{k}\). Concerning the English auctions, the results are as follows: in the Wilson setup the rate of information aggregation is proportional to the number of bidders and under the Pesendorfer and Swinkels assumptions that the rate is proportional to the square root of the number of bidders.
reviewed by: Małgorzata Doman
Mathematics Subject Classification ID: 91B26
Mathematics Subject Classification ID: 91B44
zbMATH DE Number: 2091400
zbMATH Keywords: large auctions
zbMATH Keywords: information aggregation
zbMATH Keywords: convergence rates
MaRDI profile type: Publication
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full work available at URL: s0022-0531(03)00224-2
OpenAlex ID: W2117374160
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description: scientific article; zbMATH DE number 2091400