We investigate the role of market transparency in repeated ﬁrst-price auctions. We consider a setting with private and independent values across bidders. The values are assumed to be perfectly persistent over time. We analyze the ﬁrst-price auction under three distinct disclosure regimes regarding the bid and award history. Of particular interest is the minimal disclosure regime, in which each bidder only learns privately whether he won or lost the auction at the end of each round. In equilibrium, the winner of the initial auction lowers his bids over time, while losers keep their bids constant, in anticipation of the winner’s lower future bids. This equilibrium is eﬀicient, and all information is eventually revealed. Importantly, this disclosure regime does not give rise to pooling equilibria. We contrast the minimal disclosure setting with the case in which all bids are public, and the case in which only the winner’s bids are public. In these settings, an ineﬀicient pooling equilibrium with low revenues always exists with a suﬀiciently large number of bidders.
Bergemann, Dirk and Hörner, Johannes, "Should Auctions be Transparent?" (2010). Cowles Foundation Discussion Papers. 2099.