Gaëtan Fournier: gaetan.fournier[at]univ-amu.fr
Raghul Venkatesh: raghul.venkatesh[at]univ-amu.fr
A common practice in many auctions is to offer the bidders an opportunity to improve their bids, known as a Best and Final Offer stage (BAFO). This improved bid can depend on new information regarding the asset, or information regarding the strength of the competition. In this paper, we focus on the latter effect and study which information should the seller provide to the bidders regarding the competition to maximize the revenue. We find that the strategy profile that maximizes the revenue of the seller is an equilibrium for a large enough number of bidders, regardless of the information released. However, it takes fewer bidders for it to be an equilibrium when there is no additional information. As a result, when the number of bidders is unknown, there is some advantage to the auctioneer not to reveal information and in fact, to conduct a simpler one-stage auction.