On Multiplicative Bidding Strategies

Michael H. Rothkopf
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Michael H. Rothkopf: Xerox Corporation, Palo Alto, California

Operations Research, 1980, vol. 28, issue 3-part-i, 570-575

Abstract: Some models of competitive bidding consider only bidding strategies in which the bid is a preselected multiple of an estimate of the value (or cost) of the subject of the auction. This paper examines the effect of such a restriction on these models. In order to do so, it is necessary to show that the ratio of two positive random variables (e.g., a cost and a cost estimate) cannot be statistically independent of each of them unless the ratio is always the same.

Date: 1980
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