Banerjee, Priyodorshi; Chakraborty, Archishman - Department of Economics, Rutgers University-Newark - 2004
In symmetric common value auctions where bidders differ ex-post in information quality, a seller may benefit from imposing a ceiling on allowable bids. By reducing the winner's curse facing poorly informed bidders, a ceiling encourages them to bid aggressively. This may reduce information rents...