Prices and the Winner's Curse

We usually assume increases in supply, allocation by rationing, and exclusion of potential buyers will never raise prices. But all of these activities raise the expected price in an important set of cases when common-value assets are sold. Furthermore, when we make the assumptions needed to rule out these "anomalies" when buyers are symmetric, small asymmetries among the buyers necessarily cause the anomalies to reappear.

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Year of publication:	1999-04-16
Authors:	Bulow, Jeremy ; Klemperer, Paul
Institutions:	EconWPA
Subject:	Auction theory \| common value \| winner's curse \| PCS auction \| spectrum auction \| airwaves auction \| initial public offerings \| IPO

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Extent:	application/pdf
Series:	Game Theory and Information.
Type of publication:	Book / Working Paper
Notes:	Type of Document - Tex/pdf; prepared on PC; to print on HP/PostScript; pages: 33 ; figures: none. We never published this piece and now we would like to reduce our mailing and xerox cost by posting it. 33 pages
Classification:	D44 - Auctions ; L96 - Telecommunications ; G30 - Corporate Finance and Governance. General ; G24 - Investment Banking; Venture Capital; Brokerage
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005118642