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Risk aversion in auctions with asymmetrically informed bidders: A "desensitizer" from uncertainty


  • Muñoz-García, Félix
  • Orozco-Alemán, Sandra


In the context of first-price auctions with asymmetrically informed bidders, we show that risk aversion not only increases a player's bid, but also makes him less sensitive to the probability that other bidders are informed about his private valuation.

Suggested Citation

  • Muñoz-García, Félix & Orozco-Alemán, Sandra, 2011. "Risk aversion in auctions with asymmetrically informed bidders: A "desensitizer" from uncertainty," Economics Letters, Elsevier, vol. 112(1), pages 38-41, July.
  • Handle: RePEc:eee:ecolet:v:112:y:2011:i:1:p:38-41

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    References listed on IDEAS

    1. Bergemann, Dirk & Pesendorfer, Martin, 2007. "Information structures in optimal auctions," Journal of Economic Theory, Elsevier, vol. 137(1), pages 580-609, November.
    2. Péter Eső & Balázs Szentes, 2007. "Optimal Information Disclosure in Auctions and the Handicap Auction," Review of Economic Studies, Oxford University Press, vol. 74(3), pages 705-731.
    3. Krishna, Vijay, 2009. "Auction Theory," Elsevier Monographs, Elsevier, edition 2, number 9780123745071.
    4. repec:wsi:wschap:9789814374590_0009 is not listed on IDEAS
    5. Hanming Fang & Stephen Morris, 2012. "Multidimensional Private Value Auctions," World Scientific Book Chapters,in: Robust Mechanism Design The Role of Private Information and Higher Order Beliefs, chapter 9, pages 319-356 World Scientific Publishing Co. Pte. Ltd..
    6. Andreoni, James & Che, Yeon-Koo & Kim, Jinwoo, 2007. "Asymmetric information about rivals' types in standard auctions: An experiment," Games and Economic Behavior, Elsevier, vol. 59(2), pages 240-259, May.
    7. Moez Bennouri & Sonia Falconieri, 2006. "Optimal auctions with asymmetrically informed bidders," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 28(3), pages 585-602, August.
    8. Milgrom,Paul, 2004. "Putting Auction Theory to Work," Cambridge Books, Cambridge University Press, number 9780521536721, March.
    9. Maskin, Eric S & Riley, Joan G, 1985. "Auction Theory with Private Values," American Economic Review, American Economic Association, vol. 75(2), pages 150-155, May.
    10. Kim, Jinwoo & Che, Yeon-Koo, 2004. "Asymmetric information about rivals' types in standard auctions," Games and Economic Behavior, Elsevier, vol. 46(2), pages 383-397, February.
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