Signalling in auctions for risk-averse bidders

Olivier Bos, Francisco Gomez-Martinez and Sander Onderstal

PLOS ONE, 2022, vol. 17, issue 10, 1-8

Abstract: We study risk-averse equilibrium bidding in first-price and second-price sealed-bid auctions where bidders have signalling concerns, i.e., they care about how the auction outcome is interpreted by an outside observer. We find that when the winner’s identity and her payment are revealed to the outside observer, risk aversion yields less aggressive bidding behaviour in the second-price sealed-bid auction than in the risk-neutral case. Our analysis explains various revenue ranking reversals relative to the risk-neutral equilibrium observed in a recent experiment by Bos (2021).

Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0275709 (text/html)
https://journals.plos.org/plosone/article/file?id= ... 75709&type=printable (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:plo:pone00:0275709

DOI: 10.1371/journal.pone.0275709

Access Statistics for this article

More articles in PLOS ONE from Public Library of Science
Bibliographic data for series maintained by plosone ().