Reserve prices in auctions with entry when the seller is risk-averse

Diego Moreno, John Wooders

    Research output: Contribution to journalArticle

    Abstract

    We show that risk aversion raises the public reserve price rP above the seller's cost c, but lowers the secret reserve price rS below the revenue maximizing reserve price r0. Further, rP<rS. Hence, for a risk averse seller, public and secret reserve prices are ordered: c<rP<rS<r0.

    Original languageEnglish (US)
    Pages (from-to)6-9
    Number of pages4
    JournalEconomics Letters
    Volume154
    DOIs
    StatePublished - May 1 2017

    Fingerprint

    Risk-averse
    Auctions
    Seller
    Reserve price
    Revenue
    Costs
    Risk aversion

    Keywords

    • Endogenous entry
    • Public and secret reserve prices
    • Risk aversion
    • Second-price auctions

    ASJC Scopus subject areas

    • Finance
    • Economics and Econometrics

    Cite this

    Reserve prices in auctions with entry when the seller is risk-averse. / Moreno, Diego; Wooders, John.

    In: Economics Letters, Vol. 154, 01.05.2017, p. 6-9.

    Research output: Contribution to journalArticle

    Moreno, Diego ; Wooders, John. / Reserve prices in auctions with entry when the seller is risk-averse. In: Economics Letters. 2017 ; Vol. 154. pp. 6-9.
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