American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
The Bidder's Curse: Reply
American Economic Review
vol. 106,
no. 4, April 2016
(pp. 1195–1213)
Abstract
An important unresolved issue in the search literature is the question to what extent suboptimal search reflects "traditional search frictions," and to what extent it reflects behavioral biases. The distinction is important for assessing welfare, predicting firm behavior, and making policy choices. In order to make progress on this question, we need a precise theoretical distinction and micro data. I argue that Schneider's (2016) analysis and data confirm and complement the main findings in Malmendier and Lee (2011), but neither his nor our data permit us to quantitatively assess the relative importance of these determinants. I propose several feasible identification strategies. (JEL D12, D44)Citation
Malmendier, Ulrike. 2016. "The Bidder's Curse: Reply." American Economic Review, 106 (4): 1195–1213. DOI: 10.1257/aer.20151372Additional Materials
JEL Classification
- D12 Consumer Economics: Empirical Analysis
- D44 Auctions