Essays on the Economics of Information in Auctions

Informational assumptions are an important aspect of the study of auctions in economictheory. However, there has been limited research into how the assumptions made by theoristsimpact their results. I explore two different aspects of the information available to biddersin auctions. The information that is important to the theoretical study of auctions can bedivided into two types. First, there is information about the realized values of the bidders.I explore this through a model of an English auction with interdependent values wherebidders are able to acquire the private information that is realized by other bidders. Ifind that the ability to costlessly acquire additional information about competitors does notimpact the efficiency of the English auction. This is in line with other research into thistype of information acquisition. I also briefly explore the revenue implications of biddersbeing able to acquire this type of information. The second type of information is about theoverall structure from which the bidders values are drawn. In most theoretical treatmentsof auctions, it is assumed that bidders know this overall structure. I begin to relax thisassumption by adding a small amount of uncertainty about the structure of one of thebidders valuation functions in auctions with interdependent values. Here I find that boththe English auction and the second price auction are no longer efficient after the changein informational structure. I use data collected through economic experiments to test thetheoretical predictions of this model and find that the English auction is more efficient bothwith the standard informational assumptions and with the change made in the informationalstructure. Both of these results suggest that the open format of an English auction, whereinformation is revealed over the course of the auction, may mean that theoretical resultswith stronger assumptions about informational structures at the beginning of the auctionare somewhat robust to those assumptions.