Revenue maximization with partially verifiable information

Reuter, Marco

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URN:	urn:nbn:de:bsz:180-madoc-663490
Document Type:	Working paper
Year of publication:	2023
The title of a journal, publication series:	ZEW Discussion Papers
Volume:	23-051
Place of publication:	Mannheim
Publication language:	English
Institution:	Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung School of Law and Economics > VWL, Wirtschaftspolitik (Grüner 1999-)
MADOC publication series:	Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject:	330 Economics
Classification:	JEL: D44 , D82 , D83,
Keywords (English):	mechanism design , auctions , partially verifiable types , communication
Abstract:	I consider a seller selling a good to bidders with two-dimensional private information: their valuation for a good and their characteristic. While valuations are non-verifiable, characteristics are partially verifiable and convey information about the distribution of a bidder’s valuation. I derive the revenue-maximizing mechanism and show that it can be implemented by introducing a communication stage before an auction. I show that granting bidders a right to remain anonymous, i.e., to refuse participation in the communication stage, leaves the optimal mechanism unchanged and provides no benefits for the bidders.