This dissertation studies the design of auction markets where bidders are uncertain of their own values at the time of bidding. A bidder's value may depend on other bidders' private information, on total quantity of items allocated in the auction, or on the auctioneer's private information.

Chapter 1 provides a brief introduction to auction theory and summarizes the main contribution of each following chapter. Chapter 2 of this dissertation extends the theoretical study of position auctions to an interdependent values model in which each bidder's value depends on its opponents' information as well as its own information. I characterize the equilibria of three standard position auctions under this information structure, including the Generalized Second Price (GSP) auctions, Vickrey-Clarke-Groves (VCG) auctions, and the Generalized English Auctions (GEA). I first show that both GSP and VCG auctions are neither efficient nor optimal under interdependent values. Then I propose a modification of these two auctions by allowing bidders to condition their bids on positions to implement efficiency. I show that the modified auctions proposed in this chapter are not only efficient, but also maximize the search engine's revenue.

While the uncertainty of each bidder about its own value comes from the presence of common component in bidders’ ex-post values in an interdependent values model, bidders can be uncertain about their values when their values depend on the entire allocation of the auction and when their values depend on the auctioneer's private information. Chapter 3 of this dissertation studies the design of efficient auctions and optimal auctions in a license auction market where bidders care about the total quantity of items allocated in the auction. I show that the standard uniform-price auction and the ascending clock auction are inefficient when the total supply needs to be endogenously determined within the auction. Then I construct a multi-dimensional uniform-price auction and a Walrasian clock auction that can implement efficiency in a dominant strategy equilibrium under surplus-maximizing reserve prices and achieve optimal revenue under revenue-maximizing reserve prices.

Chapter 4 of this dissertation analyzes an auctioneer's optimal information provision strategy in a procurement auction in which the auctioneer has private preference over bidders' non-price characteristics and bidders invest in cost-reducing investments before entering the auction. I show that providing more information about the auctioneer's valuation over bidders' non-price characteristics encourages those favored bidders to invest more and expand the distribution of values in the auction. Concealment is the optimal information provision policy when there are two suppliers.