The evolution of bidding behavior in private-values auction and double auctions

Arbeitspapier

We apply stochastic stability to study the evolution of bidding behavior in private-values second-price, first-price and k-double auctions. The learning process has a strong component of inertia but with a small probability, the bids are modified in the direction of ex-post regrets. We identify essentially a unique bid that will be used by each type in the long run. In the second-price auction, this is the truthful bid. In the first-price auction, bidding half of one’s valuation is stable. The stable bid in the k-double auction is a toughening of the Chatterjee-Samuelson linear equilibrium strategy. If we add a friction in changing one’s bid, then truth-telling behavior is also obtained in the first-price and k-double auctions. Intuitively, the stochastically stable bid minimizes the maximal regret.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Working Paper ; No. 2007-01

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Stochastic and Dynamic Games; Evolutionary Games; Repeated Games ; Bargaining Theory; Matching Theory ; Auctions ; Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
• Thema: Stochastic Stability ; Ex-post Regret ; Second-Price Auction ; First-Price Auction ; k-Double Auction ; Auktionstheorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Saran, Rene ; Serrano, Roberto
• Ereignis: Veröffentlichung
• (wer): Brown University, Department of Economics
• (wo): Providence, RI
• (wann): 2007

Weitere Informationen

• Handle: http://hdl.handle.net/10419/80151
• Letzte Aktualisierung: 10.03.2025, 11:43 MEZ