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).
- Beliefs-based models
- Common-value auctions