A first-price sealed-bid asymmetric auction when two bidders have respective CRRA and general utility functions (Q2232676)
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scientific article; zbMATH DE number 7407977
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| English | A first-price sealed-bid asymmetric auction when two bidders have respective CRRA and general utility functions |
scientific article; zbMATH DE number 7407977 |
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A first-price sealed-bid asymmetric auction when two bidders have respective CRRA and general utility functions (English)
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8 October 2021
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Summary: We study a first-price auction with two bidders where one bidder is characterized by a constant relative risk aversion utility function (i.e., a concave power function) while the other has a general concave utility function. We establish the existence and uniqueness of the optimal strategic markups and analyze the effects of one bidder's risk aversion level on the optimal strategic markups of him and his opponent's, the allocative efficiency of the auction, and the seller's expected revenue, respectively.
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