You are more likely to experience the "winner's curse" in which type of auction?

Question

Quizplus · Accepted Answer

The "winner's curse" refers to the situation where the winner of an auction ends up paying more than the item is actually worth. This is more likely to happen in a common value auction where bidders have incomplete information about the true value of the item being auctioned off. In a sealed-bid auction, bidders submit their bids privately, so there is less opportunity for overbidding based on what others are willing to pay. Similarly, in a second-price auction, the winner pays only slightly more than the second-highest bidder, reducing the chances of overbidding. In an oral auction, on the other hand, bidders may get caught up in the excitement of the moment and bid higher than they intended to.

You Are More Likely to Experience the "Winner's Curse" in Which