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The insider's curse

Listed author(s):
  • Hernando-Veciana, Ángel
  • Tröge, Michael

The paper shows that in an open-ascending bid auction with multi-dimensional uncertainty about private and common value components, private information about the common value has negative value for a bidder if there are sufficiently many bidders. We discuss the role of the visibility of bids and the multi-dimensionality of private information for this result.

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File URL: http://www.sciencedirect.com/science/article/pii/S0899-8256(10)00092-8
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Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 71 (2011)
Issue (Month): 2 (March)
Pages: 339-350

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Handle: RePEc:eee:gamebe:v:71:y:2011:i:2:p:339-350
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622836

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  11. Benoit, Jean-Pierre & Dubra, Juan, 2006. "Information revelation in auctions," Games and Economic Behavior, Elsevier, vol. 57(2), pages 181-205, November.
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    • Marco Pagnozzi, 2003. "Sorry Winners," CSEF Working Papers 108, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 09 May 2007.
  24. Milgrom, Paul R & Weber, Robert J, 1982. "A Theory of Auctions and Competitive Bidding," Econometrica, Econometric Society, vol. 50(5), pages 1089-1122, September.
  25. Krishna, Vijay, 2003. "Asymmetric English auctions," Journal of Economic Theory, Elsevier, vol. 112(2), pages 261-288, October.
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  27. Juan-José Ganuza, 2004. "Ignorance Promotes Competition: An Auction Model of Endogenous Private Valuations," RAND Journal of Economics, The RAND Corporation, vol. 35(3), pages 583-598, Autumn.
  28. Athey, Susan, 2001. "Single Crossing Properties and the Existence of Pure Strategy Equilibria in Games of Incomplete Information," Econometrica, Econometric Society, vol. 69(4), pages 861-889, July.
  29. Campbell, Colin M. & Levin, Dan, 2000. "Can the Seller Benefit from an Insider in Common-Value Auctions?," Journal of Economic Theory, Elsevier, vol. 91(1), pages 106-120, March.
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