A pure variation of risk in first-price auctions / Oliver Kirchkamp; J. Philipp Reiss; Abdolkarim Sadrieh
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Discovery
1066773807
URN
urn:nbn:de:gbv:3:2-938884
DOI
ISBN
ISSN
Autorin / Autor
Beiträger
Körperschaft
Erschienen
Magdeburg : Otto-von-Guericke-Universität Magdeburg, Fakultät für Wirtschaftswissenschaft, 2006
Umfang
1 Online-Ressource (36 Seiten, 0,33 MB) : Diagramme
Ausgabevermerk
This version: November 10, 2008
Sprache
eng
Anmerkungen
Inhaltliche Zusammenfassung
We introduce a new method of varying the risk that bidders face in first-price private value auctions. We find that decreasing bidders' risk significantly reduces the degree of overbidding relative to the risk-neutral Bayesian-Nash equilibrium prediction. This implies that risk affects bidding behavior as generally expected in auction theory. While resolving a long-standing debate on the effect of risk on auction behavior, our results give rise to a new puzzle. As risk is diminished and overbidding decreases for most of the value range, a significant degree of underbidding sets in for very low values.
Schriftenreihe
Working paper series ; 2006, 26 ppn:58927368X