Vickrey auctions in the theory of expected utility with rank-dependent probabilities

Edi Karni*, Zvi Safra

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

When decision makers maximize expected utility with rank-dependent probabilities and the object being auctioned is a risky prospect then, with independent private value, Vickrey auctions lose their demand revealing property. Moreover, they might be non-Pareto optimal.

Original languageEnglish
Pages (from-to)15-18
Number of pages4
JournalEconomics Letters
Volume20
Issue number1
DOIs
StatePublished - 1986

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