Payoff equivalence in sealed bid auctions and the dual theory of choice under risk

This paper considers single item auctions in the private values framework, with buyers whose preferences satisfy the axioms of Yaari’s [Econometrica 55 (1987) 95] dual theory of choice under risk. It is shown that when their valuations are independently distributed, risk averse buyers are indifferent among all the auctions contained in a large family of mechanisms that includes the standard auctions