We show that information aggregation in primary financial markets fails precisely when investors hold socially useful information for screening projects. Being wary of the Winner's Curse, less optimistic investors refrain from making financing offers, since their offers would be accepted only when a project is unviable. Their information is therefore lost. The Winner's Curse and associated information loss grow with the number of informed market participants, so that larger markets can lead to worse financing decisions and higher cost of capital for firms seeking financing. Precommitment to ration fundraising allocations, collusive club bidding, and shorting markets can mitigate the inefficiency.

中文翻译：

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金融市场中的信息黑洞

我们表明，当投资者持有对社会有用的信息来筛选项目时，一级金融市场的信息聚合就会失败。出于对赢家诅咒的警惕，不太乐观的投资者不会提出融资要约，因为只有当项目不可行时，他们的要约才会被接受。他们的信息因此丢失。赢家的诅咒和相关的信息损失随着知情的市场参与者的数量而增加，因此更大的市场可能会导致更糟糕的融资决策和寻求融资的公司更高的资本成本。预先承诺配给筹款分配、串通俱乐部竞标和做空市场可以缓解效率低下的情况。