We study information aggregation when
n bidders choose, based on their private information, between two concurrent common‐value auctions. There are
k
s
identical objects on sale through a uniform‐price auction in market
s and there are an additional
k
r
objects on auction in market
r, which is identical to market
s except for a positive reserve price. The reserve price in market
r implies that information is not aggregated in this market. Moreover, if the object‐to‐bidder ratio in market
s exceeds a certain cutoff, then information is not aggregated in market
s either. Conversely, if the object‐to‐bidder ratio is less than this cutoff, then information is aggregated in market
s as the market grows arbitrarily large. Our results demonstrate how frictions in one market can disrupt information aggregation in a linked, frictionless market because of the pattern of market selection by imperfectly informed bidders.
Private Information Revelation in Common-Value Auctions
