# Price of Anarchy for Mechanisms with Risk-Averse Agents

arXiv: https://arxiv.org/abs/1804.09468 · HTML: https://mlsanity.com/paper/1804.09468/

## Key facts

- Cited by 1 papers in the map (data through 14 Oct 2026).
- First posted on arXiv 25 Apr 2018.

## Built on by (most cited first, 1 of 1)

- [An Algorithmic Introduction to Savings Circles](https://mlsanity.com/paper/2203.12486/) (2022)

## Abstract (arXiv)

We study the price of anarchy of mechanisms in the presence of risk-averse agents. Previous work has focused on agents with quasilinear utilities, possibly with a budget. Our model subsumes this as a special case but also captures that agents might be less sensitive to payments than in the risk-neutral model. We show that many positive price-of-anarchy results proved in the smoothness framework continue to hold in the more general risk-averse setting. A sufficient condition is that agents can never end up with negative quasilinear utility after playing an undominated strategy. This is true, e.g., for first-price and second-price auctions. For all-pay auctions, similar results do not hold: We show that there are Bayes-Nash equilibria with arbitrarily bad social welfare compared to the optimum.