Prevalence and magnitude of capitalized-expectations effects on surplus extraction

Determine the prevalence and quantitative impact of capitalized expectations and reserve-price-induced overvaluation in DAO token markets on surplus extraction and initial investment under the sequential auction mechanism.

Background

Because the reserve price is set at the pre-auction token price, anticipated future improvements can be capitalized into token prices, potentially reducing extractable surplus or even blocking otherwise valuable projects if expectations overshoot.

The authors explicitly state uncertainty about how common or strong these phenomena are, while emphasizing their potential to significantly affect initial and ongoing investment incentives.