Strategic Implications of Uncertainty over One's Own Private Value in Auctions

Eric Bennett Rasmusen, Kelley School of Business, Indiana University

Abstract

Bidders have to decide whether and when to incur the cost of estimating their own values in auctions. This can explain sniping-- flurries of bids late in auctions with deadlines-- as the result of bidders trying to avoid stimulating other bidders into examining their bid ceiling more carefully.