Multidimensional private value auctions

Hanming Fang, Stephen Morris

Research output: Contribution to journalArticlepeer-review

40 Scopus citations


We consider parametric examples of symmetric two-bidder private value auctions in which each bidder observes her own private valuation as well as noisy signals about her opponent's private valuation. We show that, in such environments, the revenue equivalence between the first and second price auctions (SPAs) breaks down and there is no definite revenue ranking; while the SPA is always efficient allocatively, the first price auction (FPA) may be inefficient; equilibria may fail to exist for the FPA. We also show that auction mechanisms provide different incentives for bidders to acquire costly information about opponents' valuation.

Original languageEnglish (US)
Pages (from-to)1-30
Number of pages30
JournalJournal of Economic Theory
Issue number1
StatePublished - Jan 2006

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics


  • Allocative efficiency
  • Information acquisition
  • Multidimensional auctions
  • Revenue equivalence


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