CVA Auctions Flashcards
1
Q
What is a common value auction? (CVA)
A
The value of the item is the same to all bidders, and bidders receive signal related to the value of the item
2
Q
What is the winners curse
A
since everyone has the same value. Winning the auctions in class means that everyone else in the class was pessimistic about its contents
In other words, winning could be bad news
3
Q
What is the key idea of CVA
A
To get information on other bidders
