A First-Price Sealed-Bid Asymmetric Auction When Two Bidders Have Respective CRRA and General Utility Functions

Mingming Gong, Shulin Liu and Alfred Peris

Discrete Dynamics in Nature and Society, 2021, vol. 2021, 1-15

Abstract: We study a first-price auction with two bidders where one bidder is characterized by a constant relative risk aversion utility function (i.e., a concave power function) while the other has a general concave utility function. We establish the existence and uniqueness of the optimal strategic markups and analyze the effects of one bidder’s risk aversion level on the optimal strategic markups of him and his opponent’s, the allocative efficiency of the auction, and the seller’s expected revenue, respectively.

Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:hin:jnddns:5592402

DOI: 10.1155/2021/5592402

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