Common Value Auctions with Voluntary and Qualified Entry
نویسندگان
چکیده
We study auctions under different entry rules. Existing evidence about common value auctions points toward a severe overbidding phenomenon (winner’s curse) and high bankruptcy rate. In an experiment, we show that voluntary entry makes winner’s curse bids and bankruptcies more frequent, compared to a treatment with random assignment to the auctions. Instead, bankruptcy rates decrease when bidders must qualify by showing a history of superior performance. This study improves upon existing experiments where all subjects are usually placed exogenously into auctions, a feature that may compromise their external validity. It also provides valuable empirical evidence about the common field practices of bidders self-selecting into auctions and regulations preventing the entry of unqualified bidders.
منابع مشابه
Common Value Auctions with Voluntary Entry
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