Robust Bidding in First-Price Auctions: How to Bid Without Knowing What Others Are Doing

• 成果类型: Article
• 署名作者: Kasberger, Bernhard; Schlag, Karl H.
• 署名单位: Heinrich Heine University Dusseldorf; University of Vienna
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2023.4899
• 发表日期: 2024
• 页码: 4219-4235
• 关键词: robust decision making; First-price auction; minimax loss; empirical loss; nonequilibrium model

摘要

We propose how to bid in first-price auctions when a bidder knows the own value but not how others will bid. To do this, we introduce a methodology to show how to make choices in strategic settings without assuming common knowledge or equilibrium behavior. Accordingly, we first eliminate environments that are believed not to occur and then find a robust rule that performs well in the remaining environments. We test our bids using data from laboratory experiments and the field and find that our bids outperform those made by real bidders.