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Adversarial risk analysis for auctions using non-strategic play and level-k thinking: A general case of n bidders with regret.

Authors :
Ejaz, Muhammad
Joshi, Chaitanya
Joe, Stephen
Source :
Communications in Statistics: Theory & Methods; 2023, Vol. 52 Issue 20, p7146-7164, 19p
Publication Year :
2023

Abstract

First-price sealed-bid auctions have been modeled using a utility function that takes into account bidders' regret in case of winning or losing the auctioned item. However, that modeling does not consider bidders' wealth which is an important determinant of bidders' behavior in these auctions. In this paper, we apply an adversarial risk analysis approach for these auctions and find solutions using non-strategic play and level-k thinking solution concepts assuming n bidders. We define new regret parameters and a modified utility function to incorporate the effect of bidders' wealth on their bidding behavior. In our modeling, we assume that the auctioned item is a normal item and has a reserve price. We give numerical examples to illustrate our methodology for each solution concept. [ABSTRACT FROM AUTHOR]

Details

Language :
English
ISSN :
03610926
Volume :
52
Issue :
20
Database :
Complementary Index
Journal :
Communications in Statistics: Theory & Methods
Publication Type :
Academic Journal
Accession number :
170393361
Full Text :
https://doi.org/10.1080/03610926.2022.2042023