The winner's curse with private values.¤

This paper challenges the view that winner's curse phenomena should be at-tributed to the existence of an element commonly valued by the bidders. We show that winner's curse phenomena may arise in private value setting. We also show that bid functions may exhibit properties that are generally thought to be inconsistent with the private value paradigm, namely that in ¯rst and second price auctions, bid functions may become less agressive when the number of bidders rise