IDEAS home Printed from https://ideas.repec.org/p/nid/ovolij/009.html
   My bibliography  Save this paper

Utility Equivalence in Sealed Bid Auctions and the Dual Theory of Choice Under Risk

Author

Listed:
  • Oscar Volij

    (Department of Economics, Brown University, and Department of Economics, Hebrew University of Jerusalem.)

Abstract

This paper analyzes symmetric, single item auctions in the private values framework, with buyers whose preferences satisfy the axioms of Yaari's (1987) dual theory of choice under risk. It is shown that when their valuations are independently and identically distributed, buyers are indifferent among all the auctions contained in a big family of mechanisms which includes the standard auctions. It is also shown that in the linear equilibria of the sealed bid double auction, as the degree of players' risk aversion grows arbitrarily large, the ex post inefficiency of the mechanism tends to vanish.

Suggested Citation

  • Oscar Volij, 1999. "Utility Equivalence in Sealed Bid Auctions and the Dual Theory of Choice Under Risk," Economic theory and game theory 009, Oscar Volij, revised 25 Mar 1999.
    • Handle: RePEc:nid:ovolij:009
    as

    Download full text from publisher

    File URL: http://volij.co.il/publications/papers/auct3.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Volij, Oscar & Winter, Eyal, 2002. "On risk aversion and bargaining outcomes," Games and Economic Behavior, Elsevier, vol. 41(1), pages 120-140, October.

    More about this item

    Keywords

    Auctions; non-expected utility; risk aversion.;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nid:ovolij:009. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oscar Volij (email available below). General contact details of provider: http://volij.co.il/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.