Equilibrium Information Acquisition in Optimal Auctions
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Equilibrium Information Acquisition in Optimal Auctions
We study non-cooperative information acquisition by bidders who will compete in an optimally-designed auction. The bidders simultaneously choose experiments privately revealing information about their respective willingnesses to pay. The auctioneer, knowing the experiments but not the realizations, designs an optimal auction against the resulting information structure. Bidders’ best-responses are Myerson-regular: they require no ironing. In the symmetric equilibrium we characterize, each bidder adopts an information structure that satisfies a somewhat stronger regularity property. Among symmetric profiles with this property we show that it is the unique equilibrium.