Social Science Job Candidate Seminar

Incentives of competitors to reveal private information are explored when there are both common and private components to their valuations and private information is held on both dimensions. When agents have only one private signal, the literature suggests they do not have incentives to communicate, because revealing the only signal makes them fully lose their information advantage. However, when agents observe multiple signals, they may have incentives to reveal some signals in order to earn higher profits from the remaining ones. This paper shows that there exists an equilibrium with full revelation of common-value signals and full concealment of private-value signals in competitions including standard auctions and Bertrand oligopolies. This equilibrium achieves full efficiency and usually gives the seller a higher profit. Experiments confirm that agents who hide private information in a pure common value environment choose to reveal common value information in the presence of additional private value information.