. During the first public auction of Enron-abilia (office equipment, signs, etc.), over 1000 people were physically present.An additional 14,000 were registered on line.The famous four-foot tall "crooked E" sign sold for $44,000.Many pieces of used equipment sold for more than they sold for new.For example, a 20" Sony TV which retails for under $350 sold for $525.(Houston Chronicle, 9/26/2002).

About two months later, a second auction was held and the secondcrooked E sign sold for $10,500.About 200 bidders were present.A much smaller group of people were registered on line. (Houston Chronicle, 12/4/2002).

Using the winner's curse and its associated leverage points, explain why these much higher prices were paid at the first auction than the second auction for the "crooked E" sign and other equipment. (6 points)