Alp Atakan (Queen Mary University)

“Price Discovery in a Large Auction with Costly Information”

Abstract: We study a common-value auction in which a large number of identical, indivisible object are sold to a large number of ex-ante identical bidders with unit demand. There is costly information acquisition or costly entry. We derive the limit price distribution. This allows us to quantify the information content of price and provide necessary and sufficient conditions for information aggregation.