Kocher, Martin; Pahlke, Julius; Trautmann, Stefan T. - 2013
Auctions often involve goods exhibiting a common knowledge ex-post risk. Precautionary bidding predicts that under … expected utility, ex-post risk leads DARA bidders to reduce their bids by more than the appropriate risk premium. Because the … degree of riskiness of the good, and bidders risk aversion, are difficult to observe in field settings, we conduct …