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- Title
Disclosure policies in all‐pay auctions with bid caps and stochastic entry: The impact of risk aversion.
- Authors
Wang, Xiangyu; Liu, Shulin
- Abstract
We investigate how risk aversion affects the organizer's disclosing the actual number of bidders in an all‐pay auction with an exogenous bid cap and stochastic entry. With an exogenous probability of participation, the organizer prefers fully concealing the number of participating bidders when bidders are risk neutral. However, this result does not hold with risk aversion. Specifically, whether the organizer prefers fully concealing or fully revealing information depends on the number of potential bidders, the probability of participation, and the size of bid caps. A special case of endogenous entry shows that the organizer's preference is similar to the risk‐neutral case.
- Subjects
RISK aversion; AUCTIONS; DISCLOSURE; BIDDERS; PROBABILITY theory
- Publication
Bulletin of Economic Research, 2023, Vol 75, Issue 4, p1181
- ISSN
0307-3378
- Publication type
Article
- DOI
10.1111/boer.12398