Auctions are generally not efficient when the object’s expected value depends on\udprivate and common value information. We report a series of first-price auction\udexperiments to measure the degree of inefficiency that occurs with financially\udmotivated bidders. While some subjects fall prey to the winner’s curse, they\udweigh their private and common value information in roughly the same manner\udas rational bidders, with observed efficiencies close to predicted levels. Increased\udcompetition and reduced uncertainty about the common value positively\udaffect revenues and efficiency. The public release of information about the\udcommon value also raises efficiency, although less than predicted.
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