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 …

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 …

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. …

bid exceeds the private valuation of the bank’s coalition partner (overbidding). We derive new and testable cross …-sectional predictions of the overbidding theory, and provide empirical support using auction premiums as dependent variable. Interestingly …

This paper demonstrates theoretically and experimentally that in first price auctions, overbidding with respect to risk …