The winner's curse: why is the cost of sports mega-events so often underestimated?
AbstractAuction theory, when the bidders do not know the value of what is auctionned, is used to explain how the Olympic Games are allocated to competing bidding cities. It is a centralized allocation process with asymmetric information which usually comes out with a winner's curse. Various indicators of the latter are proposed and exemplified, the major one being the systematic ex ante underestimation of the Olympics costs.
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Date of creation: 2012
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Publication status: Published, International Handbook on the Economics of Mega Sporting Events, Edward Elgar (Ed.), 2012, 37-69
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auctions; bids; winner's curse; asymmetric information; cost underestimation; mega sporting events; Olympics;
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