Never say never: Optimal exclusion and reserve prices with expectations-based loss-averse buyers

• 成果类型: Article
• 署名作者: Balzer, Benjamin; Rosato, Antonio
• 署名单位: University of Technology Sydney; University of Queensland; University of Naples Federico II
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2025.106045
• 发表日期: 2025
• 关键词: reference-dependent preferences; loss aversion; reserve price; First-price auction; Second-price auction; Personal equilibrium

摘要

We analyze reserve prices in auctions with independent private values when bidders are expectations-based loss averse. We find that the optimal public reserve price excludes fewer bidder types than under risk neutrality. Moreover, we show that public reserve prices are not optimal as the seller can earn a higher revenue with mechanisms that better leverage the attachment effect. We discuss two such mechanisms: i) an auction with a secret and random reserve price, and ii) a mechanism where an auction with a public reserve price is followed by a negotiation if the reserve price is not met. Both of these mechanisms expose more bidder types to the attachment effect, thereby increasing bids and ultimately revenue.