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eBook Common Value Auctions and the Winner's Curse download
Moneymaking
Author: Dan Levin,John H. Kagel
ISBN: 0691016674
Subcategory: Economics
Pages 424 pages
Publisher Princeton University Press (August 11, 2002)
Language English
Category: Moneymaking
Rating: 4.4
Votes: 157
ePUB size: 1358 kb
FB2 size: 1250 kb
DJVU size: 1623 kb
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eBook Common Value Auctions and the Winner's Curse download

by Dan Levin,John H. Kagel


In such auctions the value of each item is about the same to all bidders, but different bidders have different information about the underlying value.

The winner's curse is a phenomenon that may occur in common value auctions, where all bidders have the same (ex post) value for an item but receive different private (ex ante).

The winner's curse is a phenomenon that may occur in common value auctions, where all bidders have the same (ex post) value for an item but receive different private (ex ante) signals about this value and wherein the winner is the bidder with the most optimistic evaluation of the asset and therefore will tend to overestimate and overpay

In such auctions the value of each item is about the same to all bidders, but different bidders have different information about the underlying value.

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Kagel, John . Levin, Dan. Common Value Auctions and the Winner's Curse. Please find details to our shipping fees here. Princeton university press. RRP: Recommended Retail Price.

PDF In common value auction experiments, individual judgment errors significantly alter market outcomes . There is evidence that bidders fall prey to the winner’s curse because they fail to extract information from hypothetical events-like winning an auction.

PDF In common value auction experiments, individual judgment errors significantly alter market outcomes relative to standard economic formulations. This paper investigates experimentally whether bidders in a common value auction perform better when the requirements for this cognitive issue-also denoted by contingent reasoning-are relaxed, leaving all other parameters unchanged.

Few forms of market exchange intrigue economists as do auctions, whose theoretical and practical implications are enormous. John Kagel and Dan Levin, complementing their own distinguished research with papers written with other specialists, provide a new focus on common value auctions and the "winner's curse." In such auctions the value of each item is about the same to all bidders, but different bidders have different information about the underlying value. Virtually all auctions have a common value element; among the burgeoning modern-day examples are those organized by Internet companies such as eBay. Winners end up cursing when they realize that they won because their estimates were overly optimistic, which led them to bid too much and lose money as a result.

The authors first unveil a fresh survey of experimental data on the winner's curse. Melding theory with the econometric analysis of field data, they assess the design of government auctions, such as the spectrum rights (air wave) auctions that continue to be conducted around the world. The remaining chapters gauge the impact on sellers' revenue of the type of auction used and of inside information, show how bidders learn to avoid the winner's curse, and present comparisons of sophisticated bidders with college sophomores, the usual guinea pigs used in laboratory experiments. Appendixes refine theoretical arguments and, in some cases, present entirely new data. This book is an invaluable, impeccably up-to-date resource on how auctions work--and how to make them work.