The Winner's Curse and the Failure of the Law of Demand
AbstractWe 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 out these ‘anomalies’ when buyers are symmetric, small asymmetries among buyers necessarily cause the anomalies to reappear.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1754.
Date of creation: Nov 1997
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- Matthew Shum, 1998. "The Econometrics Of English Auctions," Working Papers mshum-98-02, University of Toronto, Department of Economics.
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