Regulating bidder participation in auctions can potentially increase efficiency compared to standard auction formats with free entry. We show that the relative performance of two such mechanisms, a standard first-price auction with free entry and an entry rights auction, depends nonmonotonically on the precision of information that bidders have about their costs prior to deciding whether to participate in a mechanism.
Regulating Bidder Participation in AuctionsVivek Bhattacharya, James Roberts, and Andrew Sweeting ,
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The RAND Journal of Economics