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http://hdl.handle.net/10419/56836
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| Title: | | The winner's curse under behavioral institutions  |
| Authors: | | Chlaß, Nadine |
| Issue Date: | | 2011 |
| Series/Report no.: | | Jena economic research papers 2011,011 |
| Abstract: | | Empirically, social dilemma under information asymmetry are often much less pronounced than theory predicts. Traders experience a winner's curse and maintain efficiency enhancing exchange of commodities when theory predicts none. Especially under competition, cursed parties undergo severe losses and thereby fund social welfare. Hence, if one cures the winner's curse, one often decreases social welfare. Here, I test how market efficiency can be maintained without individual losses. In a competitive common value auction, parties sidestep both market inefficiency and a winner's curse by judging quality-by-price, and setting price-by-quality. |
| Subjects: | | imperfect information common value auction price-quality relation |
| JEL: | | D61 D82 L13 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Jena Economic Research Papers, MPI für Ökonomik
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