find that bidders are highly risk-averse and choosing non-binding reserve prices would minimize procurement costs, whereas …, we propose a new empirical method that allows us to predict the expected procurement cost at any reserve price. Being … find no unobserved heterogeneity, but find bidder-asymmetry in both costs and risk-aversion that vary across the jobs. We …

-aversion (CRRA) coefficients and distributions of private costs. Our Bayesian approach evaluates the likelihood by solving type … counterfactual study shows that choosing a type-specific cost-minimizing reserve price marginally reduces the procurement cost …