Competitive Bidding with Dependent Value Estimates

Journal Article

A bidding situation in which there is uncertainty about the value of the item of interest is modeled. The uncertainty is modeled in probabilistic terms, and the model allows the errors of estimation (the differences between expected values and the actual value) of the bidders to be dependent. The effect of this dependence on the “winner's curse” (the tendency for the highest bidder to be one who has overvalued the item) is studied, and optimal bidding strategies are determined.

Full Text

Duke Authors

Cited Authors

  • Winkler, RL; Brooks, DG

Published Date

  • June 1980

Published In

Volume / Issue

  • 28 / 3-part-i

Start / End Page

  • 603 - 613

Published By

Electronic International Standard Serial Number (EISSN)

  • 1526-5463

International Standard Serial Number (ISSN)

  • 0030-364X

Digital Object Identifier (DOI)

  • 10.1287/opre.28.3.603

Language

  • en