Partnerships of Bidders with Constant Relative Risk Aversions

In this paper, we study a dynamic auction for allocating a single indivisible project while different participants have different bid values for the project. When the price rises continuously, the bidders can retreat the auction and obtain the compensation by the difference between the price at retr...

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Main Authors:	Pingping Zhao, Kaili Xiang, Peimin Chen
Format:	Article
Language:	English
Published:	Hindawi Limited 2020-01-01
Series:	Mathematical Problems in Engineering
Online Access:	http://dx.doi.org/10.1155/2020/3925835

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spelling	doaj-3f0b889c7c204f6095c4095ee9b15f782020-11-25T02:53:18ZengHindawi LimitedMathematical Problems in Engineering1024-123X1563-51472020-01-01202010.1155/2020/39258353925835Partnerships of Bidders with Constant Relative Risk AversionsPingping Zhao0Kaili Xiang1Peimin Chen2School of Economic Mathematics, Southwestern University of Finance and Economics, Chengdu 611130, ChinaSchool of Economic Mathematics, Southwestern University of Finance and Economics, Chengdu 611130, ChinaShanghai Business School, Shanghai 200235, ChinaIn this paper, we study a dynamic auction for allocating a single indivisible project while different participants have different bid values for the project. When the price rises continuously, the bidders can retreat the auction and obtain the compensation by the difference between the price at retreating time and the previous bid price. The final successful bidder achieves the project and pays compensations to others. We show that the auction of bidders with constant relative risk aversion (CRRA) has a unique equilibrium. While the relative risk aversion coefficient approaches to zero, the equilibrium with CRRA bidders would approach to the equilibrium with risk-neutral bidders.http://dx.doi.org/10.1155/2020/3925835
collection	DOAJ
language	English
format	Article
sources	DOAJ
author	Pingping Zhao Kaili Xiang Peimin Chen
spellingShingle	Pingping Zhao Kaili Xiang Peimin Chen Partnerships of Bidders with Constant Relative Risk Aversions Mathematical Problems in Engineering
author_facet	Pingping Zhao Kaili Xiang Peimin Chen
author_sort	Pingping Zhao
title	Partnerships of Bidders with Constant Relative Risk Aversions
title_short	Partnerships of Bidders with Constant Relative Risk Aversions
title_full	Partnerships of Bidders with Constant Relative Risk Aversions
title_fullStr	Partnerships of Bidders with Constant Relative Risk Aversions
title_full_unstemmed	Partnerships of Bidders with Constant Relative Risk Aversions
title_sort	partnerships of bidders with constant relative risk aversions
publisher	Hindawi Limited
series	Mathematical Problems in Engineering
issn	1024-123X 1563-5147
publishDate	2020-01-01
description	In this paper, we study a dynamic auction for allocating a single indivisible project while different participants have different bid values for the project. When the price rises continuously, the bidders can retreat the auction and obtain the compensation by the difference between the price at retreating time and the previous bid price. The final successful bidder achieves the project and pays compensations to others. We show that the auction of bidders with constant relative risk aversion (CRRA) has a unique equilibrium. While the relative risk aversion coefficient approaches to zero, the equilibrium with CRRA bidders would approach to the equilibrium with risk-neutral bidders.
url	http://dx.doi.org/10.1155/2020/3925835
work_keys_str_mv	AT pingpingzhao partnershipsofbidderswithconstantrelativeriskaversions AT kailixiang partnershipsofbidderswithconstantrelativeriskaversions AT peiminchen partnershipsofbidderswithconstantrelativeriskaversions
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Partnerships of Bidders with Constant Relative Risk Aversions

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