auction - in a setting that extends Maskin and Riley (1984, Econometrica 52: 1473-1518) in three aspects: (i) the seller can … be risk averse, (ii) the bidders can have heterogeneous risk preferences, and (iii) the auction can have a binding … verifiable by deduction prior to the auction - the premium also benefits the seller and therefore leads to a Pareto improvement …

We compare two procurement mechanisms, bundling and unbundling, in a two-stage auction model with risk-averse suppliers …. They differ in whether two sequential tasks of investment and production are procured through a single auction or two … sequential auctions. Each auction adopts a first-price format. A winner is awarded a fixed-price contract. Each supplier …

behavior in the first-price auction, where both risk-aversion and loss aversion induce ‘overbidding.' We then show that the …

and unobserved auction heterogeneity, and propose a Bayesian estimation method based on Bernstein polynomials. Monte Carlo …