Should Auctions be Transparent?

We investigate the role of market transparency in repeated first-price auctions. We consider a setting with independent private and persistent values. We analyze three distinct disclosure regimes regarding the bid and award history. In the minimal disclosure regime each bidder only learns privately whether he won or lost the auction. In equilibrium the allocation is efficient and the minimal disclosure regime does not give rise to pooling equilibria. In contrast, in disclosure settings where either all or only the winner’s bids are public, an inefficient pooling equilibrium with low revenues exists. We gratefully acknowledge financial support from NSF SES 0851200 and ICES 1215808. We would like to thank seminar participants at the NBER Market Design Meeting, University of Mannheim, University of Munich and the University of Pennsylvania for their constructive comments. Lastly, thanks to Yi Chen for excellent research assistance. Department of Economics, Yale University, New Haven, CT 06511, [email protected] Department of Economics, Yale University, New Haven, CT 06511, [email protected] 1