Risk manipulation in auctions reduces overbidding, changing bidding behavior significantly.
The article introduces a new way to change the level of risk for bidders in auctions. By reducing bidders' risk in certain types of auctions, they found that bidders tend to bid more reasonably, which supports the idea that people are cautious about taking risks. When they tested this method in a different type of auction, they discovered that bidding behavior stayed consistent even when risk was manipulated, which aligns with what auction theory predicts.