The Winner's Curse under Behavioral Institutions Volume 5 Jena Economic Research Papers 2011-11-25 2011 2007 2011-011 imperfect information common value auction price-quality relation Empirically, social dilemma under information asymmetry are often much less pronounced than theory predicts. Traders experience a winner’s curse and maintain efficiency enhancing exchange of commodities when theory predicts none. Especially under competition, cursed parties undergo severe losses and thereby fund social welfare. Hence, if one cures the winner’s curse, one often decreases social welfare. Here, I test how market efficiency can be maintained without individual losses. In a competitive common value auction, parties sidestep both market inefficiency and a winner’s curse by judging quality-by-price, and setting price-by-quality. jportal_jpjournal_00000016 2011-02-25T13:12:19.448Z 2011-02-25T13:11:44.083Z