The Winner's Curse and the Failure of the Law of Demand

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 buyers necessarily cause the anomalies to reappear.

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Year of publication:	1997-11
Authors:	Bulow, Jeremy I. ; Klemperer, Paul
Institutions:	C.E.P.R. Discussion Papers
Subject:	Airwaves Auction \| Auction Theory \| Common Value \| Initial Public Offering \| IPOs \| PCS Auction \| Spectrum Auction \| Winner's Curse

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Extent:	application/pdf
Series:	CEPR Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	Number 1754
Classification:	D44 - Auctions ; G24 - Investment Banking; Venture Capital; Brokerage ; G30 - Corporate Finance and Governance. General ; L96 - Telecommunications
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005114197