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A Non-Game-Theoretic Approach to Bidding in First-Price and All-Pay Auctions
2018
Social Science Research Network
We propose a novel approach to the modelling of behavior in first-price and allpay auctions that builds on the presumption that bidders do not engage in game-theoretic reasoning. Our models, AsP (for Aspired-Payoff) and nIBE (for naïve Impulse Balance Equilibrium), exploit the information available to bidders and assume risk neutrality, no best-responding behavior and no profit-maximization. Their parameter-free variants entail either overbidding or Nash equilibrium bidding. We assess their
doi:10.2139/ssrn.3233164
fatcat:fuyurdqjtrb6xhwiszuusoan7m