A common‐value auction with state‐dependent participation

This paper analyzes a common‐value, first‐price auction with state‐dependent participation. The number of bidders, which is unobservable to them, depends on the true value. For participation patterns many bidders in each state, bidding equilibrium may be “pooling” type—with high probability, winning bid same across states and below ex ante expected value—or “partially revealing” no significant atoms distribution an increasing Which these forms will arise determined by likelihood ratio at top signal states. We fully characterize this relation show how pattern determines extent information aggregation price.