Abstract
We consider how information concentration affects a seller’s revenue in common value auctions. The common value is a function of \(n\) random variables partitioned among \(m \le n\) bidders. For each partition, the seller devises an optimal mechanism. We show that whenever the value function allows scalar sufficient statistics for each player’s signals, the mechanism design problem is well-defined. Additionally, whenever a common regularity condition is satisfied, a coarser partition always reduces revenues. In particular, any merger or collusion among bidders reduces revenue.
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