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The winner's curse: why is the cost of sports mega-events so often underestimated?

Wladimir Andreff ()
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Wladimir Andreff: CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: Auction theory, when the bidders do not know the value of what is auctionned, is used to explain how the Olympic Games are allocated to competing bidding cities. It is a centralized allocation process with asymmetric information which usually comes out with a winner's curse. Various indicators of the latter are proposed and exemplified, the major one being the systematic ex ante underestimation of the Olympics costs.

Keywords: auctions; bids; winner's curse; asymmetric information; cost underestimation; mega sporting events; Olympics (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-cta, nep-ppm, nep-spo and nep-tur
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00703466
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Published in Wolfgang Maennig et Andrew Zimbalist. International Handbook on the Economics of Mega Sporting Events, Edward Elgar, pp.37-69, 2012

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