Reserve prices in auctions with entry when the seller is risk-averse

We show that risk aversion raises the public reserve price rp above the seller's cost c, but lowers the secret reserve price rs below the revenue maximizing reserve price ro. Further, r(p) < r(s). Hence, for a risk averse seller, public and secret reserve prices are ordered: c < r(p) < r(s) < r(0). (C) 2017 Elsevier B.V. All rights reserved.Moreno acknowledges financial support from the Ministerio Economía y Competitividad (Spain), grants ECO2014-55953-P and MDM2014-0431, and from the Comunidad de Madrid, grant S2015/HUM-3444. Wooders is grateful for financial support from the Australian Research Council’s Discovery Projects funding scheme (project number DP140103566)