Kirchkamp, Oliver; Reiss, J. Philipp; Sadrieh, Abdolkarim - Maastricht : METEOR, Maastricht Research School of … - 2008
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...