The Role of Risk Preferences in Pay-to-Bid Auctions

Autor:	Brennan C. Platt, Joseph Price, Henry Tappen
Rok vydání:	2013
Předmět:	TheoryofComputation_MISCELLANEOUS Auction theory Strategy and Management Dutch auction TheoryofComputation_GENERAL Management Science and Operations Research Microeconomics Revenue equivalence Bid shading Unique bid auction Economics Vickrey auction Common value auction English auction
Zdroj:	Management Science. 59:2117-2134
ISSN:	1526-5501 0025-1909
Popis:	We analyze a new auction format in which bidders pay a fee each time they increase the auction price. Bidding fees are the primary source of revenue for the seller but produce the same expected revenue as standard auctions (assuming risk-neutral bidders). If risk-loving preferences are incorporated in the model, expected revenue increases. Our model predicts a particular distribution of ending prices, which we test against observed auction data. The degree of fit depends on how unobserved parameters are chosen; in particular, a slight preference for risk has the biggest impact in explaining auction behavior, suggesting that pay-to-bid auctions are a mild form of gambling. This paper was accepted by Peter Wakker, decision analysis.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::9fd1b864d03d960dcd673564ac5adab0 https://doi.org/10.1287/mnsc.1120.1666 Zobrazit plný text záznamu Plný text ve formátu PDF