This paper analyzes the effects of buyer and seller risk aversion in first and second-price auctions. The setting is … to optimally set the reserve price. In both auctions the seller's optimal reserve price is shown to decrease in his own … risk aversion, and more so in the first-price auction. Thus, greater seller risk aversion increases the ex post efficiency …

This paper analyzes the effects of buyer and seller risk aversion in first and second-price auctions. The setting is … to optimally set the reserve price. In both auctions the seller’s optimal reserve price is shown to decrease in his own … risk aversion, and more so in the first-price auction. Thus, greater seller risk aversion increases the ex post efficiency …

This paper characterizes the optimal first-price auction (FPA) and second-price auction (SPA) for selling rights … entails a lower reserve price, a higher expected revenue, and higher expected utilities for at least some or all bidders than …