Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/211482
Authors: 
Fugger, Nicolas
Gillen, Philippe
Riehm, Tobias
Year of Publication: 
2019
Series/Report no.: 
ZEW Discussion Papers No. 19-060
Abstract: 
We show that it is beneficial for a buyer to conduct a multi-stage mechanism if bidders are loss averse. In a first step, we derive a revenue equivalence principle. Fixing the multi-stage structure, the revenue is independent of the chosen payment rule. Secondly, we introduce a simple two-stage mechanism which always leads to a decrease in procurement costs compared to any single-stage auction. Finally we derive the optimal efficient two-stage mechanism.
Subjects: 
Auctions
Experiment
Loss aversion
Preferences
JEL: 
D44
D47
D90
Document Type: 
Working Paper

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