Publication

2006 - Division of Research, Harvard Business School, Boston, Massachusetts

Language

English

Word Count

4,000 words, Guess

Page Count

16 pages

Identifiers

Description

This paper proposes tests to empirically examine whether auction prices aggregate information away from the limit. These tests are based on 1) a combination of comparative statics with respect to the number of bidders and the dispersion of information signals and 2) comparison of actual prices to predicted Nash equilibrium prices based on observed auction parameters. When applied to eBay online auctions for computers, these tests suggest that prices partially aggregate information, but do not converge to the common value. Even partial information aggregation may represent a potential efficiency gain over one-to-one trade of used goods with uncertain common values.

Subjects

Series Statement

  • Working paper / Division of Research, Harvard Business School -- 06-010

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