This paper tests the theoretical predictions of Vardy (2000). Specifically, we examine the effects of auction mechanism an information structure on the incentives for information acquisition in common value auctions. The two-player game we analyze experimentally looks as follows. First, ‘nature’ chooses an unobservable realization V for the common value of a single good. Then, both bidders decide how much to invest in information acquisition. The more they spend, the higher the precision of their signal. Subsequently, the bidders privately receive the signal that gives them an indication of the value of the object. Finally, bids are submitted and the good is auctioned off according to some pre-specified mechanism. We analyze the most common auction forms. That is, first-price sealed bid an English auctions. Moreover, we look at two information structures: 1) Covert information acquisition, in which players do not observe the precision of their opponent’s signal an 2) overt information acquisition, in which players o get to observe the precision of their opponent’s signal before bidding in the auction. Theory predicts that incentives for information acquisition are stronger in first-price auctions than in second price auctions when the information acquisition is covert, but that the opposite result holds when the information acquisition process is public. Our experiments provide a sharp test of this theoretical result.

Co-author Donald Dale