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Economic theory is often abused in practical policy-making. There is frequently excessive focus on sophisticated theory … at the expense of elementary theory; too much economic knowledge can sometimes be a dangerous thing. Too little attention … politically important. I illustrate with some disastrous government auctions, but also show the value of economic theory. …
Persistent link: https://www.econbiz.de/10005498003
The experimental literature has documented that there is overbidding in second-price auctions, regardless of bidders' valuations. In contrast, in first-price auctions there tends to be overbidding for large valuations, but underbidding for small valuations. We show that the experimental evidence...
Persistent link: https://www.econbiz.de/10005498113
This paper provides an elementary, non-technical, survey of auction theory, by introducing and describing some of the … critical papers in the subject. The most important of these are reproduced in a companion book, The Economic Theory of Auctions …
Persistent link: https://www.econbiz.de/10005666747
We use a classroom game, the ‘Wallet Game’, to show that in standard ascending, i.e. English, auctions of close-to-common-values objects, even slight asymmetries between bidders can have very large effects on prices. Examples of small asymmetries are a small value advantage for one bidder or...
Persistent link: https://www.econbiz.de/10005791269
We consider second-price and first-price auctions in the symmetric independent private values framework. We modify the standard model by the assumption that the bidders have reference-based utility, where the reserve price (minimum bid) plays the role of the reference point. In contrast to the...
Persistent link: https://www.econbiz.de/10005792017
in Seattle in August 2000. We discuss the strong connections between auction theory and 'standard' economic theory, and …
Persistent link: https://www.econbiz.de/10005792157
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...
Persistent link: https://www.econbiz.de/10005114197
The most important issues in auction design are the traditional concerns of competition policy-preventing collusive …
Persistent link: https://www.econbiz.de/10005114514
foreign and domestic competition, the consequences of soft budgets, and the role of managerial incentives and managerial human …
Persistent link: https://www.econbiz.de/10005504282
government regulation may reduce transaction costs, intensifying the competition associated with a given market structure, and we …
Persistent link: https://www.econbiz.de/10005504465