In a common value auction with incomplete information, bid shading is used to compensate for the winner's curse.
Bid shading is not only a normative theoretical construct, it was detected in the above-mentioned real world auction markets.
[7] This paper provides the first model of a sequential auction with both endogenous strategic selling and forward-looking longer-lived buyers who can shade their bids.
The most related model of optimal sequential auctioning by Vulcano, van Ryzin, and Maglaras (2002) (VRM),[7] who study a monopolist selling to unit-demand strategic buyers who each only lives for one period.
While VRM’s bidders do not shade their bids by assumption, strategic sequential auctioning has an effect on their bidding strategy because they are forward-looking: there is an incentive to overbid and make the seller sell more units in the current period than would be optimal for her.