This paper draws a remarkably simple bridge between auction theory and incentive theory. It considers the auctioning of an indivisible project among several fi rms. The firms have private information about their future cost at th e bidding stage, and the selected firm ex post invests in cost...

The authors study behavior of a large trader with private information about the mean of an asset with a risky return. They argue that if the variability of the return is not too great, typically the trader will find it desirable to ensure that the market price does not reveal his information,...