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Reserve Prices in Auctions with Entry when the Seller in Risk Averse

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dc.affiliation.dptoUC3M. Departamento de Economíaes
dc.contributor.authorMoreno, Diego
dc.contributor.authorWooders, John
dc.contributor.editorUniversidad Carlos III de Madrid. Departamento de Economíaes
dc.date.accessioned2016-12-14T13:47:12Z
dc.date.available2016-12-14T13:47:12Z
dc.date.issued2016-12
dc.description.abstractWe study optimal public and secret reserve prices for risk averse sellers in second price auctions with endogenous entry. We show that an optimal public reserve price rP (observed by buyers prior to making their entry decisions) is above the seller's cost, c, whereas the secret reserve price rS (observed by buyers only upon entering the auction) is below the revenue maximizing reserve price r0. Thus, risk aversion raises public reserve prices, but lowers secret reserve prices. Further, we show that an optimal public reserve price is smaller than the secret reserve price (i.e., rP < rS). Hence, for a risk averse seller public and secret reserve prices are ordered: c < rP < rS < r0.en
dc.description.sponsorshipMoreno gratefully acknowledges financial support from the Ministerio Economía y Competitividad (Spain), grants ECO2014-55953-P and MDM2014-0431, and from Comunidad de Madrid, grant S2015/HUM-3444. Wooders is grateful for financial support from the Australian Research Council’s Discovery Projects funding scheme (Project Number DP140103566).en
dc.format.mimetypeapplication/pdf
dc.identifier.issn2340-5031es
dc.identifier.urihttps://hdl.handle.net/10016/23951
dc.identifier.uxxiDT/0000001495
dc.language.isoeng
dc.relation.hasversionhttp://hdl.handle.net/10016/25137
dc.relation.ispartofseriesUC3M working papers. Economicsen
dc.relation.ispartofseries16-19es
dc.relation.projectIDGobierno de España. ECO2014-55953-Pes
dc.relation.projectIDGobierno de España. MDM2014-0431es
dc.relation.projectIDComunidad de Madrid. S2015/HUM-3444/MADECO-CMes
dc.rightsAtribución-NoComercial-SinDerivadas 3.0 España*
dc.rights.accessRightsopen accessen
dc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/3.0/es/*
dc.subject.jelD44es
dc.subject.otherSecond-price auctionsen
dc.subject.otherEndogenous entryen
dc.subject.otherPublic and secret reserve pricesen
dc.subject.otherRisk Aversionen
dc.titleReserve Prices in Auctions with Entry when the Seller in Risk Averseen
dc.typeworking paper*
dc.type.hasVersionAO*
dspace.entity.typePublication
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