EconPapers    
Economics at your fingertips  
 

Creating a winner’s curse via jump bids

David Ettinger () and Fabio Michelucci ()

Review of Economic Design, 2016, vol. 20, issue 3, No 1, 173-186

Abstract: Abstract We show that jump bids can be used by a bidder to create a winner’s curse and preserve an informational advantage that would otherwise disappear in the course of an open ascending auction. The effect of the winner’s curse is to create allocative distortions and reduce the seller’s expected revenue. Two novel features of equilibrium jump bids are derived. First, the jump bid may fail to hide completely the value of the common value component. Second, a bidder with a higher type might jump bid less frequently than a bidder with a lower type.

Keywords: Auctions; Efficiency; Jump bids; Winner’s curse (search for similar items in EconPapers)
JEL-codes: D44 D82 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1007/s10058-016-0187-z Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
Working Paper: Creating a winner's curse via jump bids (2016) Downloads
Working Paper: Creating a Winner's Curse via Jump Bids (2015) Downloads
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: https://EconPapers.repec.org/RePEc:spr:reecde:v:20:y:2016:i:3:d:10.1007_s10058-016-0187-z

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/10058

DOI: 10.1007/s10058-016-0187-z

Access Statistics for this article

Review of Economic Design is currently edited by Atila Abdulkadiroglu, Fuhito Kojima and Tilman Börgers

More articles in Review of Economic Design from Springer, Society for Economic Design
Bibliographic data for series maintained by Sonal Shukla ().

 
Page updated 2020-09-11
Handle: RePEc:spr:reecde:v:20:y:2016:i:3:d:10.1007_s10058-016-0187-z