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We study a common value auction in which two bidders compete for an item the value of which is a function of three independent characteristics. Each bidder observes one of these characteristics, but one of them is 'naive' in the sense that he does not realize the other bidder's signal contains...
Persistent link: https://www.econbiz.de/10005231108
We consider an auction in which the behavior of one potential bidder departs mildly from full rationality. We show that the presence of such an inexpert bidder can be enough to discourage all of an infinitely large population of fully rational potential bidders from entering an auction....
Persistent link: https://www.econbiz.de/10014158954
This paper presents an equilibrium explanation for the persistence of naive bidding. Specifically, we consider a common value auction in which a "naive" bidder (who ignores the Winner's Curse) competes against a fully rational bidder (who understands that her rival is not). We show that the...
Persistent link: https://www.econbiz.de/10014135579
Persistent link: https://www.econbiz.de/10011127101
The auction of an object is considered, for the case in which one bidder is better-informed than the others concerning the actual value of the object. An equilibrium point solution of the competitive bidding game is determined; at this equilibrium, the expected revenue of the less-well-informed...
Persistent link: https://www.econbiz.de/10004990772
We present results of several experiments that deal with endogenous entry in auctions and auction valuation. One observation that is constant across all of the experiments we report is that laboratory subjects have a difficult time evaluating potential gains from auctions. Even after they are...
Persistent link: https://www.econbiz.de/10005076087
Multi-object auctions are traditionally analyzed as if they were a number of simultaneous independent single object auctions. Such an approximation may be very crude if bidders have budget restrictions, capacity constraints, or, in general, have non-linear utility functions. This paper presents...
Persistent link: https://www.econbiz.de/10005593151
The greedy heuristic may be used to obtain approximate solutions to integer programming problems. For some classes of problems, notably knapsack problems related to the coin changing problem, the greedy heuristic results in optimal solutions. However, the greedy heuristic does quite poorly at...
Persistent link: https://www.econbiz.de/10005762527
The distribution of the number of bidders in auctions with uncertain numbers is usually assumed to be Poisson. The observed distribution, for example in OCS Federal Offshore Oil Lease Sales, is apparently not Poisson. A simple model is presented showing that if the objects have different values...
Persistent link: https://www.econbiz.de/10005762630
A variety of practical situations involve supplying a particular commodity by some locations to satisfy the demand at others. If the demands and the costs of producing varying amounts of commodity at each location are known, then the question is how much commodity should be supplied by each...
Persistent link: https://www.econbiz.de/10005762695