Precautionary Bidding in Auctions.
We analyze bidding behavior in auctions when risk-averse buyers bid for a good whose value is risky. We show that when the risk in the valuations increases, DARA bidders will reduce their bids by more than the appropriate increase in the risk premium. Ceteris paribus, buyers will be better off biddi...
| Main Authors: | , |
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| Format: | Journal article |
| Language: | English |
| Published: |
Econometric Society
2004
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