Procurement design with loss averse bidders
| Autor: | Fugger, Nicolas, Gillen, Philippe, Riehm, Tobias |
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| Jazyk: | angličtina |
| Rok vydání: | 2019 |
| Předmět: | |
| Popis: | We show that it is beneficial for a buyer to conduct a multi-stage mechanism if bidders are loss averse. In a first step, we derive a revenue equivalence principle. Fixing the multi-stage structure, the revenue is independent of the chosen payment rule. Secondly, we introduce a simple two-stage mechanism which always leads to a decrease in procurement costs compared to any single-stage auction. Finally we derive the optimal efficient two-stage mechanism. |
| Databáze: | OpenAIRE |
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