BIDDING BEHAVIOR OF THE BIDDERS BASED ON COMPARING VALUATION TO EXPECTED PRICE

摘要

We discuss an auction (Dutch auction) where the auctioneer begins at a maximum price and where every bidder knows her own valuation of the object. Suppose that her valuation exceeds her expectation of the price. Then she might plan to bid more than she would have bid had she used some linear positive function of the valuation in which the bid would also have increased with the number of bidders. Such a revision of the Vickrey strategy is most likely in a small auction, where it may affect the expected price.