Information disclosure in optimal auctions

A celebrated result in auction theory is that the optimal reserve price in the standard private value setting does not depend on the number of bidders. We modify the framework by considering that the seller controls the accuracy with which bidders learn their valuations, and show that in such a case, the greater the number of bidders the more restrictive the reserve price. We also show that the auctioneer provides more information when using an optimal auction mechanism than when the object is always sold.Juan-José Ganuza gratefully acknowledges the support of the Barcelona GSE Research, the government of Catalonia, and the Spanish Ministry of Education and Science Through Project ECO 2011-28965. Jose Penalva acknowledges the support of the Spanish Ministry of Education and Science Through Project ECO 2012-36559