Abstract
| Original language | English |
|---|---|
| Place of Publication | Tilburg |
| Publisher | Economics |
| Number of pages | 23 |
| Volume | 2012-022 |
| Publication status | Published - 2012 |
Publication series
| Name | CentER Discussion Paper |
|---|---|
| Volume | 2012-022 |
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Keywords
- Ambiguity
- Auctions
- Revenue Equivalence
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Static vs Dynamic Auctions with Ambiguity Averse Bidders. / Carvalho, M.
Tilburg : Economics, 2012. (CentER Discussion Paper; Vol. 2012-022).Research output: Working paper › Discussion paper › Other research output
TY - UNPB
T1 - Static vs Dynamic Auctions with Ambiguity Averse Bidders
AU - Carvalho, M.
N1 - Pagination: 23
PY - 2012
Y1 - 2012
N2 - Abstract: This paper presents the outcome of a dynamic price-descending auction when the distribution of the private values is uncertain and bidders exhibit ambiguity aversion. In contrast to sealed-bid auctions, in open auctions the bidders get information about the other bidders' private values and may therefore update their beliefs on the distribution of the values. The bidders have smooth ambiguity preferences and update their priors using consequentialist Bayesian updating. It is shown that ambiguity aversion usually affects bidding behavior the same way risk aversion does, but the main result is that this is not the case for continuous price descending auctions. This is new among a few theoretical cases where ambiguity aversion does not reinforce the risk aversion implications.
AB - Abstract: This paper presents the outcome of a dynamic price-descending auction when the distribution of the private values is uncertain and bidders exhibit ambiguity aversion. In contrast to sealed-bid auctions, in open auctions the bidders get information about the other bidders' private values and may therefore update their beliefs on the distribution of the values. The bidders have smooth ambiguity preferences and update their priors using consequentialist Bayesian updating. It is shown that ambiguity aversion usually affects bidding behavior the same way risk aversion does, but the main result is that this is not the case for continuous price descending auctions. This is new among a few theoretical cases where ambiguity aversion does not reinforce the risk aversion implications.
KW - Ambiguity
KW - Auctions
KW - Revenue Equivalence
M3 - Discussion paper
VL - 2012-022
T3 - CentER Discussion Paper
BT - Static vs Dynamic Auctions with Ambiguity Averse Bidders
PB - Economics
CY - Tilburg
ER -