Pagnozzi, Marco - Centro Studi di Economia e Finanza (CSEF) - 2004
After an auction, a losing bidder can purchase the prize from the winner. We show why a strong bidder may prefer to … drop out of the auction before the price has reached her valuation, and acquire the prize in the aftermarket: a strong … common knowledge that, in equilibrium, a weak bidder will win the auction and, even without uncertainty about relative …