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 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)
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.
Working Paper: Creating a winner's curse via jump bids (2016)
Working Paper: Creating a Winner's Curse via Jump Bids (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
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
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 ().