I Won the Auction But Don't Want the Prize

Bibliographic Data

ID6284758
AuthorsMax H Bazerman (0000-0002-7009-3340, Sloan School of Management, MIT), William Samuelson (0009-0005-3736-0979, Boston University), William F Samuelson (Boston University School of Management)
Year1983
Volume27
Issue4
Pages618-634
Publication date1983-12-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueJournal of Conflict Resolution (JOURNAL)
Journal identifiersISSN: 0022-0027 • E-ISSN: 1552-8766
PublisherSAGE Publications Inc (PUBLISHER)
DOI10.1177/0022002783027004003
OpenAlexW2112980279
LanguageEN
Citations received26
References cited11

The “winner's curse” occurs in competitive situations when a successful buyer finds that he or she has paid too much for a commodity of uncertain value. This study provides an experimental demonstration of the winner's curse, and identifies factors that affect the existence and magnitude of this bidding abnormality. In an auction setting, two factors are shown to affect the incidence and magnitude of the winner's curse: (1) the degree of uncertainty concerning the value of the item up for bid and (2) the number of competing bidders. Increasing either factor will increase the range of value estimates and bids, making it more likely that the winning bidder will overestimate the true value of the commodity and thus overbid

Affect (linguistics · Bidding · Commodity · Common value auction · Curse · Econometrics · Economics · English auction · Microeconomics · Statistics · Value (mathematics · Winner's curse · Auction Theory and Applications · Consumer Market Behavior and Pricing · Experimental Behavioral Economics Studies · Mathematics · Psychology

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