Consider auctions for the following goods: a Michelangelo statue that you will display for your personal enjoyment, mineral rights for a particular plot of land, a band of cellular frequencies (to allow the provision of cellular telephone service to customers) and federal bonds.

Question 1

Of the goods above, which have the potential to cause the winners curse to appear? Why? What can a bidder do to avoid the winners curse in the auctions in which the winners curse is possible?