The Wait-and-see Option in Ascending Price Auctions

@inproceedings{Compte2003TheWO,
  title={The Wait-and-see Option in Ascending Price Auctions},
  author={Olivier Compte and Philippe Jehiel},
  year={2003}
}
Ascending auctions offer agents the option to wait and see before deciding to drop out. We show that in contexts where as time proceeds agents get finer and finer estimates of their valuations, incentives to drop out at one’s expected valuation are weak: it is optimal for agents to wait and see. We first illustrate the claim in a private value setting. We next analyze an interdependent value setting in which this wait and see option results in imperfect information aggregation. We also analyze… CONTINUE READING

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