Number of bidders and the winner's curse

Ronald Peeters and Anastas Tenev

No 31, Research Memorandum from Maastricht University, Graduate School of Business and Economics (GSBE)

Abstract: The second-price sealed-bid common-value auction exhibits lower winner's curse probability compared to the rst-price auction for any number of bidders. For both auction types, above a certain threshold adding more bidders increases the chances of the winner's curse only marginally while it decreases potential losses to the bidders and increases revenue. Below this threshold, having fewer bidders lowers the winner's curse probability and the losses to the bidders, but also the average revenue.

JEL-codes: D44 D82 H57 (search for similar items in EconPapers)
Date: 2016-01-01
New Economics Papers: this item is included in nep-mic
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https://cris.maastrichtuniversity.nl/ws/files/5241861/RM16031.pdf (application/pdf)

Related works:
Journal Article: Number of Bidders and the Winner’s Curse (2018)
Working Paper: Number of bidders and the winner’s curse (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:unm:umagsb:2016031

DOI: 10.26481/umagsb.2016031

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