An experiment on first-price common-value auctions with asymmetric information structures: The blessed winner
This paper studies the effect of holding private information on bidding behavior in common-value auctions. Three environments are studied. In the first, no bidder has any private information. In the second, all bidders hold private information. Lastly, we allow one bidder to hold private information when the opposing bidder does not. Our experiments reveal that bidders who are informed overbid, while uninformed bidders tend to underbid.