Bidding in common value fair division games: The winner’s curse or even worse? Volume 3 Jena Economic Research Papers 2009-11-04 2009 2007 2009-090 common value auction winner’s curse fair division game A unique indivisible commodity with an unknown common value is owned by group of individuals and should be allocated to one of them while compensating the others monetarily. We study the so-called fair division game (Güth, Ivanova-Stenzel, Königstein, and Strobel (2002, 2005)) theoretically and experimentally for the common value case and compare our results to the corresponding common value auction. Whereas symmetric risk neutral Nash equilibria are rather similar for both games, behavior differs strikingly. Implementing auctions and fair division games in the lab in a repeated setting under first- and second-price rule, we find that overall behavior is much more dispersed for the fair division games than for the auctions. Winners’ profit margins and shading rates are on average slightly lower for the fair division game. Moreover, we find that behavior in the fair division game separates into extreme over- and underbidding. jportal_jpjournal_00000016 2009-11-04T09:52:44.414Z 2010-12-17T11:54:11.112Z