Optimal Information Disclosure in Auctions
Published: December 2021
This paper considers a seller’s information disclosure problem in the context of a second-price auction, e.g., what much information a website should disclose about its viewers to potential advertisers in auctions for digital ad impressions. In this context, more information leads to better matches between ads and viewers but reduces competition among advertisers. The paper characterizes the seller’s optimal information disclosure strategy, which falls in between no disclosure and full disclosure.
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Abstract and Citation
Dirk Bergemann, Tibor Heumann, and Stephen Morris. 2021. American Economic Review: Insights, forthcoming.