Giliberto, S Michael; Varaiya, Nikhil P - In: Journal of Finance 44 (1989) 1, pp. 59-75
Auction theory predictions are used to test if winning bidders overpay (the "winner's curse") in FDIC sealed-bid auctions of failed banks. The authors find that winning bids tend to increase as the number of competitors increases, as predicted by theory. Further, bid levels of all bidders...