Number of bidders and the winner's curse

Ronald Peeters, Anastas Tenev

Research output: Working paper / PreprintWorking paper

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The second-price sealed-bid common-value auction exhibits lower winner's curse probability compared to the rst-price auction for any number of bidders. For both auction types, above a certain threshold adding more bidders increases the chances of the winner's curse only marginally while it decreases potential losses to the bidders and increases revenue. Below this threshold, having fewer bidders lowers the winner's curse probability and the losses to the bidders, but also the average revenue.
Original languageEnglish
PublisherMaastricht University, Graduate School of Business and Economics
Publication statusPublished - 2016

Publication series

SeriesGSBE Research Memoranda

JEL classifications

  • d44 - Auctions
  • d82 - "Asymmetric and Private Information; Mechanism Design"
  • h57 - National Government Expenditures and Related Policies: Procurement


  • Winner's curse
  • number of bidders
  • common value auctions


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