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Matching auction with winner’s curse and imperfect financial markets

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  • Matros, Alexander

Abstract

This paper explains how and why the Matching Auctions work better with Imperfect Financial Markets. We show that an efficient outsider can obtain a “good” project even if the insider has informational advantage.

Suggested Citation

  • Matros, Alexander, 2012. "Matching auction with winner’s curse and imperfect financial markets," Economics Letters, Elsevier, vol. 115(3), pages 500-503.
  • Handle: RePEc:eee:ecolet:v:115:y:2012:i:3:p:500-503
    DOI: 10.1016/j.econlet.2011.12.128
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    References listed on IDEAS

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    1. Thaler, Richard H, 1988. "Anomalies: The Winner's Curse," Journal of Economic Perspectives, American Economic Association, vol. 2(1), pages 191-202, Winter.
    2. Riley, John G & Samuelson, William F, 1981. "Optimal Auctions," American Economic Review, American Economic Association, vol. 71(3), pages 381-392, June.
    3. Holt, Charles A & Sherman, Roger, 1994. "The Loser's Curse," American Economic Review, American Economic Association, vol. 84(3), pages 642-652, June.
    4. Gary Charness & Dan Levin, 2009. "The Origin of the Winner's Curse: A Laboratory Study," American Economic Journal: Microeconomics, American Economic Association, vol. 1(1), pages 207-236, February.
    5. Klemperer, Paul, 1998. "Auctions with almost common values: The 'Wallet Game' and its applications," European Economic Review, Elsevier, vol. 42(3-5), pages 757-769, May.
    6. Maskin, Eric S & Riley, John G, 1984. "Optimal Auctions with Risk Averse Buyers," Econometrica, Econometric Society, vol. 52(6), pages 1473-1518, November.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Asymmetric information; Adverse selection; Winner’s curse; Takeover game;

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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