Payoff equivalence in sealed bid auctions and the dual theory of choice under risk
AbstractThis paper considers single item auctions in the private values framework, with buyers whose preferences satisfy the axioms of Yaari's (1987) dual theory of choice under risk. It is shown that when their valuations are independently distributed, risk averse buyers are indifferent among all the auctions contained in a large family of mechanisms that includes the standard auctions.
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Bibliographic InfoArticle provided by Elsevier in its journal Economics Letters.
Volume (Year): 76 (2002)
Issue (Month): 2 (July)
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Web page: http://www.elsevier.com/locate/ecolet
Other versions of this item:
- Volij, Oscar, 2002. "Payoff Equivalence in Sealed Bid Auctions and the Dual Theory of Choice Under Risk," Staff General Research Papers 10129, Iowa State University, Department of Economics.
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