Prices and the Winner's Curse

We usually assume increases in supply, allocation by rationing, and exclusion of potential buyers will never raise prices. But all of these activities raise the expected price in an important set of cases when common-value assets are sold. Furthermore, when we make the assumptions needed to rule out these "anomalies" when buyers are symmetric, small asymmetries among the buyers necessarily cause the anomalies to reappear.

[1]  Thorstein Veblen,et al.  The theory of the leisure class : an economic study of institutions , 1953 .

[2]  Roger B. Myerson,et al.  Optimal Auction Design , 1981, Math. Oper. Res..

[3]  M. Harris,et al.  ALLOCATION MECHANISMS AND THE DESIGN OF AUCTIONS , 1981 .

[4]  Paul R. Milgrom,et al.  A theory of auctions and competitive bidding , 1982 .

[5]  J. Geanakoplos,et al.  Multimarket Oligopoly: Strategic Substitutes and Complements , 1985, Journal of Political Economy.

[6]  John Geanakoplos,et al.  Holding Idle Capacity to Deter Entry [The Role of Investment in Entry Deterrence] , 1985 .

[7]  Richard P. McLean,et al.  Optimal Selling Strategies under Uncertainty for a Discriminating Monopolist When Demands Are Interdependent , 1985 .

[8]  A. Schotter,et al.  Perfect Equilibria in Budget Constrained Sequential Auctions: An Experimental Study , 1988 .

[9]  Jeremy I. Bulow,et al.  The Simple Economics of Optimal Auctions , 1989, Journal of Political Economy.

[10]  O. Ashenfelter.  How Auctions Work for Wine and Art , 1989 .

[11]  G. Becker,et al.  A Note on Restaurant Pricing and Other Examples of Social Influences on Price , 1991, Journal of Political Economy.

[12]  S. Bikhchandani,et al.  Equilibria in open common value auctions , 1991 .

[13]  E. Maskin,et al.  Auctions and Privatization , 1992 .

[14]  Daniel R. Vincent,et al.  The Declining Price Anomaly , 1993 .

[15]  Auctions vs. Negotiations , 1994 .

[16]  N. M. Fehr,et al.  PREDATORY BIDDING IN SEQUENTIAL AUCTIONS , 1994 .

[17]  Patrick DeGraba.  Buying Frenzies and Seller-Induced Excess Demand , 1995 .

[18]  Ronald M. Harstad,et al.  Comparative static effects of number of bidders and public information on behavior in second-price common value auctions , 1995 .

[19]  Jeremy I. Bulow,et al.  Auctions versus Negotiations , 1996 .

[20]  P. Cramton,et al.  Deficit Reduction Through Diversity: How Affirmative Action at the FCC Increased Auction Competition , 1996 .

[21]  John H. Kagel,et al.  Revenue Effects and Information Processing in English Common Value Auctions , 1996 .

[22]  B. Moldovanu,et al.  Auctions with Downstream Interaction Among Buyers , 2000 .

[23]  Kathryn Graddy,et al.  Declining Values and the Afternoon Effect: Evidence from Art Auctions , 1997 .

[24]  J. Kagel,et al.  Second-Price Auctions with Asymmetric Payoffs: An Experimental Investigation , 1997 .

[25]  P. Klemperer.  Auctions with almost common values: The 'Wallet Game' and its applications , 1998 .

[26]  Kent D. Daniel,et al.  A Theory of Costly Sequential Bidding , 1998 .

[27]  Robert W. Rosenthal,et al.  On some myths about sequenced common-value auctions , 1998 .

[28]  P. Klemperer,et al.  An Equilibrium Theory of Rationing , 1998 .

[29]  Jeremy I. Bulow,et al.  Toeholds and Takeovers , 1998, Journal of Political Economy.

[30]  Philippe Jehiel,et al.  Collusion in Auctions with Externalities , 1998 .

[31]  C. Avery,et al.  Strategic Jump Bidding in English Auctions , 1998 .

[32]  Giuseppe Lopomo.  The English Auction Is Optimal Among Simple Sequential Auctions , 1998 .

[33]  Rafi Mohammed,et al.  Intertemporal Mixed Bundling and Buying Frenzies , 1999 .

[34]  V. Denicoló,et al.  Rationing in a Durable Goods Monopoly , 1999 .

[35]  P. Cramton,et al.  Why Every Economist Should Learn Some Auction Theory * , 2000 .

[36]  P. Klemperer.  What Really Matters in Auction Design , 2001 .

[37]  P. Jehiel,et al.  On the Value of Competition in Procurement Auctions , 2002 .

[38]  P. Klemperer,et al.  The Biggest Auction Ever: The Sale of the British 3g Telecom Licences , 2001 .

[39]  Uday Rajan,et al.  Rationing and Common Values , 2001 .

[40]  Marco Pagnozzi,et al.  Advantaged Bidders and Spectrum Prices: An Empirical Analysis , 2001 .

[41]  P. Klemperer.  How (Not) to Run Auctions: The European 3g Telecom Auctions , 2001 .