Template-type: ReDif-Paper 1.0
Author-Name: Kirchkamp, Oliver 
Author-Name: Reiss, J. Philipp 
Author-Name: Sadrieh, Abdolkarim  
Author-workplace-name: METEOR
Title: A pure variation of risk in private-value auctions
Abstract: We introduce a new method of varying risk that bidders face in first-price and second-price private value auctions. We find that decreasing bidders’ risk in first-price auction reduces the degree of overbidding relative to the risk-neutral Bayesian Nash equilibrium prediction.This finding is consistent with the risk-aversion explanation of overbidding. Furthermore, we apply the method to second-price auctions and find that bidding behavior is robust to manipulating bidders'' risk as generally expected in auction theory.
Keywords: microeconomics ; 
Series: Research Memoranda
Creation-Date: 2008
Number: 050
File-URL: http://arnop.unimaas.nl/show.cgi?fid=14414
File-Format: application/pdf
File-Size: 363186
Handle: RePEc:unm:umamet:2008050