We report experimental results on the importance of information disclosure policy in first-price sealed-bid auctions. Interaction takes place in 10 periods according to a random-matching protocol, and we control the level of information feedback bidders receive after each period. When bidders are informed about the losing bids in previous periods, prices are higher than the theoretical prediction. However, when this information is not revealed the bidding becomes more competitive, and the bids come close to the theoretical prediction. We suggest that a signaling phenomenon may be important for explaining these results. © 2002 Elsevier Science B.V. All rights reserved.
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