Question

What is the winner's curse? Why can the winner's curse arise in a common-values auction but not in a private-values auction? 

   What is the winner's curse? Why can the winner's curse arise in a common-values auction but not in a private-values auction?
Microeconomics
Microeconomics
David Besanko,… 5th Edition
Chapter 15, Problem 11 ↓

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Specifically, it happens when the winner of an auction pays a price that is higher than the actual value of the item, based on information that becomes available after the auction. This results in the winner regretting their bid, as they have paid more than what  Show more…

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What is the winner's curse? Why can the winner's curse arise in a common-values auction but not in a private-values auction?
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