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 InfoPaper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 10129.
Date of creation: 01 Jan 2002
Date of revision:
Publication status: Published in Economics Letters 2002, vol. 76 no. 2, pp. 231-237
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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
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Other versions of this item:
- Volij, Oscar, 2002. "Payoff equivalence in sealed bid auctions and the dual theory of choice under risk," Economics Letters, Elsevier, vol. 76(2), pages 231-237, July.
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