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The winner's curse: why is the cost of sports mega-events so often underestimated?

  • Wladimir Andreff


    (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS)

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    Auction 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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    Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00703466.

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    Date of creation: 2012
    Date of revision:
    Publication status: Published in Wolfgang Maennig et Andrew Zimbalist. International Handbook on the Economics of Mega Sporting Events, Edward Elgar, pp.37-69, 2012
    Handle: RePEc:hal:cesptp:halshs-00703466
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    10. Levis, Mario, 1990. "The Winner's Curse Problem, Interest Costs and the Underpricing of Initial Public Offerings," Economic Journal, Royal Economic Society, vol. 100(399), pages 76-89, March.
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