1 Common Value Auctions with Voluntary and Qualified Entry*

We study auctions under different entry rules. In the field, individuals self-select into auctions and regulations often require them to meet specific qualifications. In an experiment, we assess the role of voluntary entry and financial requirements on the incidence of severe overbidding and bankruptcies, which are widespread in common value auctions. We show that voluntary entry amplifies overbidding and increases bankruptcy rates. Qualified entry has only modest impacts on overbidding. This study improves upon existing experiments where all subjects are usually placed exogenously into auctions