A seller plans an auction. Before it begins, each bidder can privately whisper their valuation. The seller can commit to the auction format but cannot commit to ignoring what she hears. If a bidder reveals high willingness to pay, the seller might tailor the mechanism to extract more from that bidder specifically.
Yan shows this doesn't happen in equilibrium. Despite hearing private signals, the seller cannot run discriminatory auctions — mechanisms that treat bidders differently based on their pre-auction messages. Under natural symmetry restrictions, the only equilibria are threshold auctions: a second-price auction with a single reserve price, run only when both bidders have signaled that their valuations exceed a threshold.
The mechanism: if the seller could discriminate, bidders would lie. A high-value bidder would mimic a low-value one to avoid being targeted. But if all bidders mimic low-value types, the messages carry no information, and the seller is back to a symmetric mechanism. The equilibrium strips the whispers of their discriminatory content while preserving their role as coordination signals — they tell the seller whether to hold the auction at all, but not whom to favor.
The structural point: pre-auction communication doesn't expand the seller's power. The seller gains the ability to cancel the auction when demand is low (the threshold), but loses nothing she wouldn't have lost anyway — the information that would enable discrimination is exactly the information that strategic communication destroys. The whisper levels the field precisely because it could have tilted it.