Winner's Curse without Overbidding
| Authors | |
|---|---|
| Publication date | 2003 |
| Journal | European Economic Review |
| Volume | Issue number | 47 |
| Pages (from-to) | 625-644 |
| Number of pages | 20 |
| Organisations |
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| Abstract | We report the results of a series of second-price auction experiments where each bidder's signal is given by a normally distributed value plus a normally distributed error. While bidders’ values differ in one treatment they are the same in another, which allows for a direct test of the "winner's curse" irrespective of confounding factors. Bidders may also fall prey to a "news curse" when they do not sufficiently take into account that signals and errors are correlated. We find that the effects of the winner's curse are mitigated by a news curse and loss or risk aversion. |
| Document type | Article |
| Published at |
https://doi.org/10.1016/S0014-2921(02)00290-8
(Final published version)
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| Permalink to this page | |
