Document de travail

Star-Shaped Probability Weighting Functions and Overbidding in First-Price Auctions

Olivier Armantier et Nicolas Treich

Résumé

There is a debate about whether risk aversion is the main source of overbidding in a first-price independent private values auction. As an alternative, we adopt a non-expected utility framework, and identify an interpretable property on the probability weighting function which always induces overbidding.

Mots-clés

probability weighting function; auctions; overbidding; non-expected utility; risk aversion;

Codes JEL

  • C70: General
  • C92: Laboratory, Group Behavior
  • D44: Auctions
  • D81: Criteria for Decision-Making under Risk and Uncertainty

Référence

Olivier Armantier et Nicolas Treich, « Star-Shaped Probability Weighting Functions and Overbidding in First-Price Auctions », TSE Working Paper, n° 09-024, mars 2009.

Voir aussi

Publié dans

TSE Working Paper, n° 09-024, mars 2009