Auction Design with Loss Averse Bidders: The Optimality of All Pay Mechanisms

Auctioneers who have an indivisible object for sale and believe that bidders are risk neutral can find the recipe for an optimal auction in Myerson (1981); auctioneers who believe that bidders are loss averse can find it here: An optimal auction is an all pay auction with minimum bid, and any optimal mechanism is all pay.

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Year of publication:	2010-06-16
Authors:	Eisenhuth, Roland
Institutions:	Volkswirtschaftliche Fakultät, Ludwig-Maximilians-Universität München
Subject:	Auctions \| Loss Aversion \| All Pay Mechanisms \| Mechanism Design \| Revenue Equivalence

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Extent:	application/pdf
Series:	MPRA Paper.
Type of publication:	Book / Working Paper
Classification:	D03 - Behavioral Economics; Underlying Principles ; D86 - Economics of Contract: Theory ; D81 - Criteria for Decision-Making under Risk and Uncertainty ; D44 - Auctions ; C70 - Game Theory and Bargaining Theory. General
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008602762