Decision Sciences
4 years ago

Risk-averse bidders shape auction choices, impacting seller strategies and outcomes.

RePEc: Research Papers in Economics
Competing first-price and second-price auctions
Joyce Delnoij, K.J.M. De Jaegher

Paper Summary

The article explores why sellers choose different auction types when selling items, and how bidders' risk aversion affects this choice. It shows that sellers prefer first-price auctions when bidders are more risk-averse, but may choose second-price auctions if bidders are less risk-averse.

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