Working Paper No. 1110

Asymmetric Information in Auctions: Are Resellers Better Appraisers?

Published: February 16, 2016Pages: 58Keywords: Ascending (English) Auctions; Asymmetric Auctions; Experience; Learning; Winner’s Curse; Bid Shading; Signal Precision; ResellersJEL-codes: C51; D44; D82; L62

Asymmetric Information in Auctions: Are Resellers Better Appraisers? Nikita Koptyug

This paper shows that in online car auctions, resellers are better at appraising the value of the cars they are bidding on than are consumers. Using a unique data set of online car auctions, I show that differences in bidding behavior between resellers and consumers can be explained by heterogeneity in the accuracy of bidders’ private signals and heterogeneity in the dispersion of private value components.

I use the asymmetric ascending auction model of Hong and Shum (2003) to quantify the differences between resellers and consumers, finding that the dispersion of reseller value signals is roughly half that of consumers and simulate three different counterfactual scenarios - one in which consumers are provided with more information, one in which consumers are subsidized and one in which consumers are allowed into all-reseller auctions.

Finally, I argue that the asymmetry in signal precision stems not from asymmetric information regarding the technical characteristics of a car but rather from uncertainty about the car’s resale value.

Nikita Koptyug


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Integrating Immigrants into the Nordic Labour Markets

An Overall Perspective


Denmark, Finland, Norway and Sweden face similar problems of integrating large groups of immigrants, especially low-educated ones from outside the EU, into their labour markets. In this volume, edited by Lars Calmfors, IFN, and Nora Sánchez Gassen in cooperation with researchers from across the Nordic Region analyse how labour market integration of immigrants can be promoted. 

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