Â鶹´«Ã½

There is an ongoing public policy debate regarding vertical integration and its concomitant information flows. Of particular concern is that the information derived by an auctioneer (such as a distributor) will be shared with its integrated bidder (such as a manufacturer), leading to a reduction in competition between the bidders. Similar competitive concerns arise regarding bid revelation policies, such as those used in public sector procurement. Modeling such situations as the repeated auctions introduced in Thomas [1996a], this paper examines the transmission of private information via the auction outcomes, and shows how that transmission is affected by the changes in market structure described above. These concerns are not present in the existing auction literature, because such information transmission is irrelevant both in series of independent auctions and in sequential auctions in which participants desire only a single item. However, when bidders desire multiple items, and when the values of those items to a bidder are correlated, the incentive to learn about opponents' values and to obscure one's own drive equilibria to depart systematically from those in standard models. I examine structural information transmission, created through various policies for conducting auctions, and its effect on strategic information transmission, which arises as an optimal response to given structural policies. I initially model information acquisition in situations where bidders do not see rival bids and learn only the identify of the winner. I then extend this model to show how the desire to conceal information about oneself affects behavior by examining repeated auctions with publicly announced bids. The auctioneers prefer a policy of revealing all bids to revealing only the winner's bid and to revealing no bid information. Finally, I show that a vertical merger between a buyer and a seller can be procompetitive due to both structural and strategic information transmission.