Should auctioneers supply early information for prospective bidders?
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- Working papers (SNF) 
Consider an auction in wich potential bidders must sink an entry investment before learning their values (Levin and Smith, 1994). Suppose the auction designer can make the bidders learn their value before entry (as in Samuelson, 1985). Such early information will induce screening of high-value bidders, and it will give rise to information rents and thereby a difference between the socially optimal auction and the auctioneer's preferred mechanism. Therefore, the auction designer has too weak incentives to produce early information. Early information may increase or reduce equilibrium entry. If entry is sufficiently reduced, early information will harm the auction designer.