Dominant strategies, superior information, and winner's curse in second-price auctions
- Cite this article as:
- Einy, E., Haimanko, O., Orzach, R. et al. Game Theory (2002) 30: 405. doi:10.1007/s001820100087
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In a general model of common-value second-price auctions with differential information, we show equivalence between the following characteristics of a bidder: (i) having a dominant strategy; (ii) possessing superior information; (iii) being immune from winner's curse. When a dominant strategy exists, it is given by the conditional expectation of the common value with respect to bidder's information field; if the dominant strategy is used, other bidders cannot make a profit.