Auction Form Preferences of Risk-Averse Bid Takers
Keith Waehrer (),
Ronald Harstad and
Michael H. Rothkopf
RAND Journal of Economics, 1998, vol. 29, issue 1, 179-192
We analyze the preferences of a risk-averse seller over the class of "standard" auctions with symmetric and risk-neutral bidders. Assuming that buyers' private signals are independently distributed, we find that a sealed-bid first-price auction with an appropriately set reserve price is preferred by all risk-averse sellers to any other standard auction. In first- and second-price auctions, the more risk averse a seller, the lower the seller's optimal reserve price. Given two first-price auctions with reserve prices and entry fees such that both have the same screening level, all risk-averse sellers prefer the auction with the lower entry fee.
References: Add references at CitEc
Citations: View citations in EconPapers (26) Track citations by RSS feed
Downloads: (external link)
http://links.jstor.org/sici?sici=0741-6261%2819982 ... O%3B2-7&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:rje:randje:v:29:y:1998:i:spring:p:179-192
Ordering information: This journal article can be ordered from
https://editorialexp ... i-bin/rje_online.cgi
Access Statistics for this article
More articles in RAND Journal of Economics from The RAND Corporation
Bibliographic data for series maintained by ().