![An optimal auction with correlated values and risk aversion [An article from: Journal of Economic Theory]](https://www.ebooknetworking.net/books/B00/0RR/bigB000RR89HM.jpg)
An optimal auction with correlated values and risk aversion [An article from: Journal of Economic Theory]
Price not available for France
You can still browse on Amazon. Try another country above.
Book Details
Ratings & Reviews
No reviews yet — be the first!
No reviews yet.
Description
This digital document is a journal article from Journal of Economic Theory, published by Elsevier in . The article is delivered in HTML format and is available in your Amazon.com Media Library immediately after purchase. You can view it with any web browser.
Description:
We consider an auction setting where the buyers are risk averse with correlated private valuations (CARA preferences, binary types), and characterize the optimal mechanism for a risk-neutral seller. We show that the optimal auction extracts all buyer surplus whenever the correlation is sufficiently strong (greater than 1/3 in absolute value), no matter how risk averse the buyers are. In contrast, we note that a sufficiently risk-averse seller would not use a full rent extracting mechanism for any positive correlation of the valuations even if the buyers were risk neutral.
Description:
We consider an auction setting where the buyers are risk averse with correlated private valuations (CARA preferences, binary types), and characterize the optimal mechanism for a risk-neutral seller. We show that the optimal auction extracts all buyer surplus whenever the correlation is sufficiently strong (greater than 1/3 in absolute value), no matter how risk averse the buyers are. In contrast, we note that a sufficiently risk-averse seller would not use a full rent extracting mechanism for any positive correlation of the valuations even if the buyers were risk neutral.
