A Theory of Auctions and Competitive Bidding¶
Milgrom, P. R., & Weber, R. J. (1982). A Theory of Auctions and Competitive Bidding. Econometrica, 50(5), 1089-1122.
Cited by¶
2 citations across 2 artifacts.
Each citation links to the sentence it supports in the citing article.
Primes¶
- Auction Theory
- For common-value auctions (where the item has an unknown common true value and bidders receive noisy signals), the abstract structure shifts, as Milgrom and Weber (1982) formalize in their general affiliated-information auction model.
This sourceUnifies private-, common-, and correlated-value settings under affiliation and derives the linkage principle (revealing information raises expected revenue in affiliated settings)
Supported in partVerified against the publisher's abstract
The abstract confirms Milgrom & Weber present a new general auction model built on affiliated random variables, but says nothing about common-value settings or noisy bidder signals.
“introduce a new general auction model, and summarize the results of our analysis. Section 3 contains a formal statement of our model, and develops the properties of affiliated random variables.”
- For common-value auctions (where the item has an unknown common true value and bidders receive noisy signals), the abstract structure shifts, as Milgrom and Weber (1982) formalize in their general affiliated-information auction model.
- Winner's Curse
- The gap between them — strictly negative for the winner under common-value competition — is the curse, and the structural insight is that this gap is a deterministic consequence of order-statistic selection, not a contingent feature of any particular auction format.
This sourceGeneral affiliated-values auction theory establishing that the gap between unconditional value and value conditional on winning is a format-independent order-statistic consequence, that optimal bidding requires shading that rises with competition and uncertainty, and that in equilibrium all bidders shade so winning prices embed the collective correction.
- The gap between them — strictly negative for the winner under common-value competition — is the curse, and the structural insight is that this gap is a deterministic consequence of order-statistic selection, not a contingent feature of any particular auction format.
Verification¶
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