How bidder's number affects optimal reserve price in first-price auctions under risk aversion
This paper shows that in the classic symmetric and independent private value environments, the seller's optimal reserve price is a decreasing function of the number of bidders in the first-price auctions when the seller and/or buyers are risk averse.
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- Audrey Hu & Steven A. Matthews & Liang Zou, 2009.
"Risk Aversion and Optimal Reserve Prices in First and Second-Price Auctions,"
PIER Working Paper Archive
09-016, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
- Hu, Audrey & Matthews, Steven A. & Zou, Liang, 2010. "Risk aversion and optimal reserve prices in first- and second-price auctions," Journal of Economic Theory, Elsevier, vol. 145(3), pages 1188-1202, May.
- Riley, John G & Samuelson, William F, 1981.
American Economic Review,
American Economic Association, vol. 71(3), pages 381-92, June.
- Maskin, Eric S & Riley, John G, 1984.
"Optimal Auctions with Risk Averse Buyers,"
Econometric Society, vol. 52(6), pages 1473-1518, November.
- Eric Maskin & John Riley, 2003.
"Uniqueness of Equilibrium in Sealed High-Bid Auctions,"
Economics Working Papers
0031, Institute for Advanced Study, School of Social Science.
- Maskin, Eric & Riley, John, 2003. "Uniqueness of equilibrium in sealed high-bid auctions," Games and Economic Behavior, Elsevier, vol. 45(2), pages 395-409, November.
- Audrey Hu & Steven A. Matthews & Liang Zou, 2009. "Risk Aversion and Optimal Reserve Prices in First and Second-Price Auctions, Second Version," PIER Working Paper Archive 10-001, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 03 Jan 2010.
- Levin, Dan & Smith, James L, 1996. "Optimal Reservation Prices in Auctions," Economic Journal, Royal Economic Society, vol. 106(438), pages 1271-83, September.
- Matthews, Steven, 1987.
"Comparing Auctions for Risk Averse Buyers: A Buyer's Point of View,"
Econometric Society, vol. 55(3), pages 633-46, May.
- Steven A. Matthews, 1985. "Comparing Auctions for Risk Averse Buyers: A Buyer's Pointof View," Discussion Papers 664R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Cox, James C & Smith, Vernon L & Walker, James M, 1988. "Theory and Individual Behavior of First-Price Auctions," Journal of Risk and Uncertainty, Springer, vol. 1(1), pages 61-99, March.
- Cox, James C. & Smith, Vernon L. & Walker, James M., 1982. "Auction market theory of heterogeneous bidders," Economics Letters, Elsevier, vol. 9(4), pages 319-325.
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