A First-Price Sealed-Bid Asymmetric Auction When Two Bidders Have Respective CRRA and General Utility Functions. (6th September 2021)

• Record Type: Journal Article
• Authors: Gong, Mingming; Liu, Shulin
• Other Names: Peris Alfred Academic Editor.
• Is Part Of: Discrete dynamics in nature and society. Volume 2021(2021)
• Publication Date: 2021-09-06
• Subjects: System analysis -- Periodicals; Dynamics -- Periodicals; Chaotic behavior in systems -- Periodicals; Differentiable dynamical systems -- Periodicals; 003.05
• DOI: 10.1155/2021/5592402
• Languages: English
• ISSNs: 1026-0226

Abstract

Abstract : 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.