We present results from a series of experiments that allow us to measure overbidding and, in particular, underbidding …

We conduct an experiment to test whether probability misperception may be a possible alternative to risk aversion to … explain overbidding in independent first-price private-values auctions. The experimental outcomes indicate that subjects …-down significantly overbidding. The structural estimation of different behavioral models suggests that i) subjects are heterogenous with …

First-price auction experiments find often substantial overbidding which is typically related to risk aversion. We … introduce a model where some bidders use constrained linear bids. As with risk aversion this leads to overbidding if valuations … are high, but in contrast to risk aversion the model predicts underbidding if valuations are low. We test this model with …

There is a debate about whether risk aversion is the main source of overbidding in a first-price independent private … probability weighting function which always induces overbidding. …

We analyse bidding behaviour in auctions when risk-averse buyers bid for a good whose value is risky. We show that when … risk in the valuations increases, DARA bidders will reduce their bids by more than the appropriate increase in the risk … marginal utility of income increases with risk, so buyers are reluctant to bid so highly. We also show that precautionary …

This paper investigates various theories explaining banks' overbidding in the fixed rate tenders of the European … explain the observed overbidding. This implies that the proposed new rules by the ECB, aimed at neutralizing interest rate … expectations, would not eliminate overbidding if the rationing rule in the fixed rate tenders remains unchanged. …

, which induces overbidding in all (first-price) auctions. In addition, it biases the perceived value distribution, which …

between the bidders? valuation. We consider risk neutral bidders who compete for the control of a target firm in which they …. Particularly, we found that if a potential bidder overbids when he gets toeholds in the target firm, the extent of overbidding is …

policies. While academic research has largely dismissed the procedure owing to its tendency to encourage overbidding, central … an auction-theoretic setting with private information about declining marginal valuations. Since overbidding entails … exposure risk, an equilibrium may exist even if bids are costless and the intended volume is pre-announced. In fact, the …