Successful uninformed bidding
AbstractThis paper provides some striking results that arise in the unique symmetric equilibrium of common value multiunit auction in which some bidders are better informed than others. We show that bidders with worse information can do surprisingly well: They can win with higher probability than better informed bidders, and sometimes, even with higher expected utility. We also find a positive relationship between the success of worse informed bidders and the number of units for sale. Finally we argue that the correct intuitive explanation of these results relies on the balance of the winner's curse and the loser's curse effects.
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Bibliographic InfoArticle provided by Elsevier in its journal Games and Economic Behavior.
Volume (Year): 48 (2004)
Issue (Month): 1 (July)
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Web page: http://www.elsevier.com/locate/inca/622836
Other versions of this item:
- Ángel Hernando Veciana, 2001. "Successful Uninformed Bidding," Working Papers. Serie AD 2001-06, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- Angel Hernando-Veciana, 2000. "Successful Uninformed Bidding," Econometric Society World Congress 2000 Contributed Papers 0791, Econometric Society.
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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