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

Eric Bennett Rasmusen
Additional contact information
Eric Bennett Rasmusen: Indiana University, Kelley School of Business

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

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)
JEL-codes: D44 (search for similar items in EconPapers)
Date: 2006
View citations in EconPapers

Downloads: (external link)
http://www.bepress.com/cgi/viewcontent.cgi?article=1261&context=bejte (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:bpj:bejtec:v:advances.6:y:2006:i:1:n:7

Access Statistics for this article

More articles in The B.E. Journal of Theoretical Economics from Berkeley Electronic Press
Series data maintained by Avi Warner ().