Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/92608
Authors: 
Veszteg, Robert F.
Akai, Kenju
Saijo, Tatsuyoshi
Serizawa, Shigehiro
Year of Publication: 
2009
Series/Report no.: 
ISER Discussion Paper, Institute of Social and Economic Research, Osaka University 747
Abstract: 
This paper analyzes an auction mechanism that excludes overoptimistic bidders inspired by the rules of the procurement auctions adopted by several Japanese local governments. Our theoretical and experimental results suggest that the endogenous exclusion rule reduces the probability of suffering a monetary loss induced by winning the auction, and also mitigates the problem of the winner's curse in the laboratory. However, this protection comes at the price of a lower revenue for the seller.
Subjects: 
common-value auctions
experiments
winner's curse
JEL: 
C91
D44
D82
Document Type: 
Working Paper

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