{"ID":2831801,"CreatedAt":"2026-06-01T04:54:23.091178241Z","UpdatedAt":"2026-06-01T04:54:23.091178241Z","DeletedAt":null,"paper_url":"https://arxiv.org/abs/2512.07798","arxiv_id":"2512.07798","title":"Optimal Auction Design under Costly Learning","abstract":"We study optimal auction design in an independent private values environment where bidders can endogenously -- but at a cost -- improve information about their own valuations. The optimal mechanism is two-stage: at stage-1 bidders register an information acquisition plan and pay a transfer; at stage-2 they bid, and allocation and payments are determined. We show that the revenue-optimal stage-2 rule is the Vickrey--Clarke--Groves (VCG) mechanism, while stage-1 transfers implement the optimal screening of types and absorb information rents consistent with incentive compatibility and participation. By committing to VCG ex post, the pre-auction information game becomes a potential game, so equilibrium information choices maximize expected welfare; the stage-1 fee schedule then transfers an optimal amount of payoff without conditioning on unverifiable cost scales. The design is robust to asymmetric primitives and accommodates a wide range of information technologies, providing a simple implementation that unifies efficiency and optimal revenue in environments with endogenous information acquisition.","short_abstract":"We study optimal auction design in an independent private values environment where bidders can endogenously -- but at a cost -- improve information about their own valuations. The optimal mechanism is two-stage: at stage-1 bidders register an information acquisition plan and pay a transfer; at stage-2 they bid, and all...","url_abs":"https://arxiv.org/abs/2512.07798","url_pdf":"https://arxiv.org/pdf/2512.07798v1","authors":"[\"Kemal Ozbek\"]","published":"2025-12-08T18:29:32Z","proceeding":"econ.TH","tasks":"[\"econ.TH\",\"cs.GT\",\"cs.IT\"]","methods":"[]","has_code":false}