Robust Bidding in First-Price Auctions: How to Bid without Knowing what Otheres are Doing
Bernhard Kasberger and
Karl Schlag ()
Vienna Economics Papers from University of Vienna, Department of Economics
Bidding optimally in first-price auctions is complicated. In the classical equilibrium framework, optimal bidding relies on detailed beliefs about other bidders' value distributions and bidding functions. This article shows how to and a robust bidding rule that does well with minimal information and thus achieves good performance in many situations. Robust bidding means to minimize the maximal difference between the payoff and the payo that could be achieved if one knew the other bidders' value distributions and bidding functions. We derive robust bidding rules under di erent scenarios, including complete uncertainty. Our bid recommendations are evaluated with experimental data.
JEL-codes: C72 D44 D81 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-des, nep-gth and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:vie:viennp:1707
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