The Bidder's Curse: Reply

Ulrike Malmendier

American Economic Review, 2016, vol. 106, issue 4, 1195-1213

Abstract: An important unresolved issue in the search literature is the question to what extent suboptimal search reflects "traditional search frictions," and to what extent it reflects behavioral biases. The distinction is important for assessing welfare, predicting firm behavior, and making policy choices. In order to make progress on this question, we need a precise theoretical distinction and micro data. I argue that Schneider's (2016) analysis and data confirm and complement the main findings in Malmendier and Lee (2011), but neither his nor our data permit us to quantitatively assess the relative importance of these determinants. I propose several feasible identification strategies. (JEL D12, D44)

JEL-codes: D12 D44 (search for similar items in EconPapers)
Date: 2016
Note: DOI: 10.1257/aer.20151372
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Citations: View citations in EconPapers (3)

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