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arXiv · 2610.25576

Winner's bliss: interdependent-value auctions with horizontal uncertainty

Federico Echenique·Yu-Ting Ho
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Abstract

We analyze auctions with interdependent values and horizontally differentiated bidders, where good news for one bidder is bad news for the other bidders. This generates a winner's bliss, reversing the well-known winner's curse: winning means buying an object that is more valuable than a na\"ıve estimate suggests. Our main result is about the English auction. We introduce the ``own effect property,'' generalizing the single-crossing condition, to prove the existence of an efficient ex-post equilibrium. Regarding revenue, we show that with affiliated signals, the English auction yields no more revenue than the second-price auction, while independent signals yield the standard revenue equivalence.

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Federico Echenique, Yu-Ting Ho. 2026-10-18. Winner's bliss: interdependent-value auctions with horizontal uncertainty. https://arxiv.org/abs/2610.25576

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