 Seller Behavior in Common Value Auctions: Cursed and Cursed AgainMichael S. Visser ()
University of Oregon Economics Department Working Papers from University of Oregon Economics Department Abstract: In common value auctions the winning bid often exceeds the value of the good purchased. This "winnerÂ’s curse" is bad for the buyers, but good for the sellers. Given this, people bidding for the right to resell a good might be expected to bid more than the expected value. Furthermore, if sellers have different forecasts about the extent of the winnerÂ’s curse among buyers, then the value of the right to resell is in turn a common value good, and potential sellers might even be expected to suffer from a winnerÂ’s curse of their own. In this paper I report on results from a new experiment where one group of people enter an auction for the right to auction a common value good to another group. I find a winnerÂ’s curse among the buyers, extending the results others have found into a new experimental setting where the auctioneer is a participant in the experiment, rather than the experimenter. I also find that the sellers do overbid, and so suffer from a curse of their own. Keywords: winnerÂ’s curse; adverse selection; auction (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ore:uoecwp:2004-7 Access Statistics for this paper More papers in University of Oregon Economics Department Working Papers from University of Oregon Economics Department Contact information at EDIRC. |
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