A Comment on “Can Relaxation of Beliefs Rationalize the Winner's Curse?: An Experimental Study”

TY - JOUR

T1 - A Comment on “Can Relaxation of Beliefs Rationalize the Winner's Curse?: An Experimental Study”

AU - Costa-Gomes, Miguel

AU - Shimoji, Makoto

PY - 2015/2/18

Y1 - 2015/2/18

N2 - IVANOV,LEVIN, AND NIEDERLE claim that the results from their common-value second-price auction experiment casts a doubt on beliefs-based models as explanations for the winner’s curse. In this note, we first argue that ILN’s theoretical arguments are misleading (Section 2). Wethen show that beliefs-based models do not necessarily imply ILN’s predictions and are compatible with some observations (Sections 3 and 4). We also discuss other points (Section 5).

AB - IVANOV,LEVIN, AND NIEDERLE claim that the results from their common-value second-price auction experiment casts a doubt on beliefs-based models as explanations for the winner’s curse. In this note, we first argue that ILN’s theoretical arguments are misleading (Section 2). Wethen show that beliefs-based models do not necessarily imply ILN’s predictions and are compatible with some observations (Sections 3 and 4). We also discuss other points (Section 5).

KW - Beliefs-based models

KW - Common-value auctions

KW - Experiments

U2 - 10.3982/ECTA11000

DO - 10.3982/ECTA11000

M3 - Article

SN - 0012-9682

VL - 83

SP - 375

EP - 383

JO - Econometrica

JF - Econometrica

IS - 1

ER -