Auctions and Bidding: A Primer

  title={Auctions and Bidding: A Primer},
  author={Paul R. Milgrom},
  journal={Journal of Economic Perspectives},
  • P. Milgrom
  • Published 1 August 1989
  • Economics
  • Journal of Economic Perspectives
Maybe the contractor was right to think bid jobs are different, but it is more likely that he suffered from too simple a view of what is involved in preparing a competitive bid. Our analysis will show that even an experienced estimator working in familiar terrain can lose money if he doesn't understand the subtleties of competitive bidding. The phenomenon experienced by the painting contractor, known as the " Winner's Curse," is just one of the surprising and puzzling conclusions that have been… 
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