Auction Theory, 2nd Edition

118 Asymmetries and Other Complications

since min{·, ·} is a concave function. Thus, the expected revenue when informa-

tion is publicly released is lower than when it is not.

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8.2 ASYMMETRIC EQUILIBRIA IN SYMMETRIC

SECOND-PRICE AUCTIONS

With private values, it is a weakly dominant strategy to bid one’s value in a

second-price auction (in an English auction, it is a dominant strategy to drop

out when the price reaches the value). With interdependent values, however,

bidders typically do not have dominant strategies in either auction format. In

the previous chapter, we derived symmetric equilibria of both auctions and

compared the resulting revenues. But even with symmetric bidders, the second-

price and English auctions may have other, asymmetric,