English versus Vickrey auctions with loss-averse bidders

• 成果类型: Article
• 署名作者: von Wangenheim, Jonas
• 署名单位: University of Bonn
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2021.105328
• 发表日期: 2021
• 关键词: Vickrey auction; English auction; Japanese auction; Expectations-based loss aversion; revenue equivalence; Dynamic loss aversion

摘要

Evidence suggests that people evaluate outcomes relative to expectations. I analyze this expectations-based loss aversion a la Koszegi and Rabin in the context of dynamic and static auctions, where the reference point is given by the (endogenous) equilibrium outcome. If agents update their reference point during the auction, the arrival of information crucially affects equilibrium behavior. Consequently, I show that-even with independent private values-the Vickrey auction yields strictly higher revenue than the (ascending clock) English auction, violating the well-known revenue equivalence. (c) 2021 Elsevier Inc. All rights reserved.