Chen, Kay-Yut and Plott, Charles R. (1998) Nonlinear Behavior in Sealed Bid First Price Auctions. Games and Economic Behavior, 25 (1). pp. 34-78. ISSN 0899-8256. doi:10.1006/game.1997.0627. https://resolver.caltech.edu/CaltechAUTHORS:20140224-162141381
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Abstract
Agents drew values from nonuniform distributions in first price sealed bid auctions. As a result, the theoretical bidding behavior is nonlinear. Three linear rules of thumb with increasing complexity are used as benchmarks to gauge the accuracy of the Constant Relative Risk Aversion Model (CRRAM). CRAMM is more accurate then the Markdown Model and the Simple Ad Hoc Model, but not as accurate as the Sophisticated Ad Hoc Model. The data support the relaxation of the rational expectations hypothesis and suggest that the predictive power of game theoretic models can be improved by improvements in the theory of belief formation.
| Item Type: | Article | ||||||||||||
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| Additional Information: | © 1998 by Academic Press. Received March 16, 1994. The financial support of the National Science Foundation and the Caltech Laboratory for Experimental Economics and Political Science is gratefully acknowledged. We also thank John Ledyard, Mahmoud El-Gamal, John Kagel, Dan Levin, James Walker, and Robert Wilson for many helpful suggestions. | ||||||||||||
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| Issue or Number: | 1 | ||||||||||||
| Classification Code: | JEL: C72; C91; C92; D44 | ||||||||||||
| DOI: | 10.1006/game.1997.0627 | ||||||||||||
| Record Number: | CaltechAUTHORS:20140224-162141381 | ||||||||||||
| Persistent URL: | https://resolver.caltech.edu/CaltechAUTHORS:20140224-162141381 | ||||||||||||
| Official Citation: | Kay-Yut Chen, Charles R Plott, Nonlinear Behavior in Sealed Bid First Price Auctions, Games and Economic Behavior, Volume 25, Issue 1, October 1998, Pages 34-78, ISSN 0899-8256, http://dx.doi.org/10.1006/game.1997.0627. (http://www.sciencedirect.com/science/article/pii/S0899825697906278) | ||||||||||||
| Usage Policy: | No commercial reproduction, distribution, display or performance rights in this work are provided. | ||||||||||||
| ID Code: | 43962 | ||||||||||||
| Collection: | CaltechAUTHORS | ||||||||||||
| Deposited By: | INVALID USER | ||||||||||||
| Deposited On: | 25 Feb 2014 16:04 | ||||||||||||
| Last Modified: | 10 Nov 2021 16:45 |
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