Prices and the Winner's Curse
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 the buyers necessarily cause the anomalies to reappear.
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Bibliographic InfoPaper provided by EconWPA in its series Game Theory and Information with number 9904003.
Length: 33 pages
Date of creation: 16 Apr 1999
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Auction theory; common value; winner's curse; PCS auction; spectrum auction; airwaves auction; initial public offerings; IPO;
Other versions of this item:
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
- G30 - Financial Economics - - Corporate Finance and Governance - - - General
- G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
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122247000000000369, UCLA Department of Economics.
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- R. Preston McAfee & John McMillan, 1996. "Analyzing the Airwaves Auction," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 159-175, Winter.
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