decreasing bidders' risk significantly reduces the degree of overbidding relative to the risk-neutral Bayesian-Nash equilibrium …-standing debate on the e?ect of risk on auction behavior, our results give rise to a new puzzle. As risk is diminished and overbidding …We introduce a new method of varying the risk that bidders face in first-price private value auctions. We find that …

We present results from a series of experiments that allow us to measure overbidding and, in particular, underbidding …

We present results from a series of experiments that allow us to measure overbidding and, in particular, underbidding …

We conduct an experiment to test whether probability misperception may be a possible alternative to risk aversion to … explain overbidding in independent first-price private-values auctions. The experimental outcomes indicate that subjects …-down significantly overbidding. The structural estimation of different behavioral models suggests that i) subjects are heterogenous with …

First-price auction experiments find often substantial overbidding which is typically related to risk aversion. We … introduce a model where some bidders use constrained linear bids. As with risk aversion this leads to overbidding if valuations … are high, but in contrast to risk aversion the model predicts underbidding if valuations are low. We test this model with …

overbidding in auctions. As a workhorse we use the second-price all-pay and the first-price winner-pay auction. Both risk and …In this paper we use an experiment to compare a theory of risk aversion and a theory of spite as an explanation for … spite can be used to rationalize deviations from risk neutral equilibrium bids in auctions. We exploit that equilibrium …

We analyse bidding behaviour in auctions when risk-averse buyers bid for a good whose value is risky. We show that when … risk in the valuations increases, DARA bidders will reduce their bids by more than the appropriate increase in the risk … marginal utility of income increases with risk, so buyers are reluctant to bid so highly. We also show that precautionary …