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The Winner's Curse and the Failure of the Law of Demand.

Abstract:
We usually assume increases in supply, allocation by rationing, and exclusion of potential buyers will never raise prices. But all of these activities raise the expected price in an important set of cases when common-value assets are sold. Furthermore, when we make the assumptions needed to rule out these 'anomalies' when buyers are symmetric, small asymmetries among buyers necessarily cause the anomalies to reappear.

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Publisher:
CEPR
Volume:
1754
Series:
C.E.P.R. Discussion Papers
Host title:
C.E.P.R. Discussion Papers
Publication date:
1997-01-01
Paper number:
1754
Language:
English
UUID:
uuid:08500bfc-4f78-42da-b4e0-d2e72fb465d8
Local pid:
oai:economics.ouls.ox.ac.uk:11572
Deposit date:
2011-08-16

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