Economic theory predicts that in a first-price auction with equal and observable valuations, bidders earn zero profits. Theory also predicts that if valuations are not common knowledge, then since it is weakly dominated to bid your valuation, bidders will bid less and earn positive profits....

The ability of a long-lived seller to maintain and profit from a good reputation may induce her to provide high quality or effort despite short-run incentives to the contrary. This incentive remains in place with private monitoring, provided that buyers share their information. However, this...