eBay Auctions Unveil Winner's Curse Impact on Bidders' Profits
Online auctions like eBay are popular, and researchers studied coin auctions to understand bidding behavior. They found that a bidder's profits decrease by 3.2% when more bidders join. It costs $3.20 in expected profit for a bidder to enter an auction. Items with higher value are more likely to have secret reserve prices. This helps sellers maximize their profits. The study also developed new methods to estimate auction models.