Strategic Implications of Uncertainty over One's Own Private Value in Auctions

Eric Rasmusen ()

The B.E. Journal of Theoretical Economics, 2006, vol. 6, issue 1, 24

Abstract: A rational bidder in a private-value auction should be reluctant to incur the cost of perfectly estimating his value if it might not matter to the success of his bidding strategy. This can explain sniping---flurries of bids at the end of auctions---as the result of other bidders trying to avoid stimulating the victim into learning more about his value. The idea of value discovery also explains why a bidder might increase his bid ceiling in the course of an auction and why he would like to know the private values of other bidders.

Keywords: auctions; private-value; sniping; internet auctions (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (35)

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Working Paper: Strategic Implications of Uncertainty Over One’s Own Private Value in Auctions (2004)
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DOI: 10.2202/1534-5963.1261

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