Successful Uninformed Bidding
This paper studies multiunit common value auctions with informed and less informed bidders. We show that bidders with less information can bid very aggressively and do surprisingly well in terms of probability of winning and expected revenue. We also show that the degree of aggressiveness and success of bidders with less information is positively related to the number of units for sale. We explain these phenomena in terms of the balance of the winner's curse and the loser's curse and their differential effect on bidders with different quality of information.
|Date of creation:||01 Aug 2000|
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- Wolfgang Pesendorfer & Jeroen M. Swinkels, 1997.
"The Loser's Curse and Information Aggregation in Common Value Auctions,"
Econometric Society, vol. 65(6), pages 1247-1282, November.
- Wolfgang Pesendorfer & Jeroen M. Swinkels, 1995. "The Loser's Curse and Information Aggregation in Common Value Auctions," Discussion Papers 1147, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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"The value of information in a sealed-bid auction,"
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Elsevier, vol. 10(1), pages 105-114, June.
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- Holt, Charles A & Sherman, Roger, 1994. "The Loser's Curse," American Economic Review, American Economic Association, vol. 84(3), pages 642-52, June.
- Engelbrecht-Wiggans, Richard & Milgrom, Paul R. & Weber, Robert J., 1983. "Competitive bidding and proprietary information," Journal of Mathematical Economics, Elsevier, vol. 11(2), pages 161-169, April.
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- Levin, Dan & Harstad, Ronald M., 1986.
"Symmetric bidding in second-price, common-value auctions,"
Elsevier, vol. 20(4), pages 315-319.
- Harstad, Ronald M., 1991. "Asymmetric bidding in second-price, common-value auctions," Economics Letters, Elsevier, vol. 35(3), pages 249-252, March.
- Arupratan Daripa, 1996. "Multi-Unit Auctions Under Proprietary Information: Information Free Rides and Revenue Banking," Archive Working Papers 015, Birkbeck, Department of Economics, Mathematics & Statistics.
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