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A Learning Approach to Auctions

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  • Hon-Snir, Shlomit
  • Monderer, Dov
  • Sela, Aner

Abstract

We analyze a repeated first-price auction in which the types of the players are determined before the first round. It is proved that if every player is using either a belief-based learning scheme with bounded recall or a generalized fictitious play learning scheme, then for sufficiently large time, the players' bids are in equilibrium in the one-shot auction in which the types are commonly known.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Theory.

Volume (Year): 82 (1998)
Issue (Month): 1 (September)
Pages: 65-88

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Handle: RePEc:eee:jetheo:v:82:y:1998:i:1:p:65-88

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Web page: http://www.elsevier.com/locate/inca/622869

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  1. Monderer, Dov & Shapley, Lloyd S., 1996. "Fictitious Play Property for Games with Identical Interests," Journal of Economic Theory, Elsevier, vol. 68(1), pages 258-265, January.
  2. Paul Milgrom & John Roberts, 2010. "Adaptive and Sophisticated Learning in Repeated Normal-Form Games," Levine's Working Paper Archive 418, David K. Levine.
  3. Fudenberg Drew & Kreps David M., 1993. "Learning Mixed Equilibria," Games and Economic Behavior, Elsevier, vol. 5(3), pages 320-367, July.
  4. Elmar WOLFSTETTER, 1994. "Auctions: An Introduction," SFB 373 Discussion Papers 1994,13, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
  5. Drew Fudenberg & David K. Levine, 1993. "Self-Confirming Equilibrium," Levine's Working Paper Archive 2147, David K. Levine.
  6. Kandori, M. & Mailath, G.J., 1991. "Learning, Mutation, And Long Run Equilibria In Games," Papers 71, Princeton, Woodrow Wilson School - John M. Olin Program.
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  13. Wilson, Robert, 1992. "Strategic analysis of auctions," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 8, pages 227-279 Elsevier.
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  19. Roth, Alvin E. & Erev, Ido, 1995. "Learning in extensive-form games: Experimental data and simple dynamic models in the intermediate term," Games and Economic Behavior, Elsevier, vol. 8(1), pages 164-212.
  20. Laffont, J.J., 1996. "Game Theory and Empirical Economics: The Case of Auction Data," Papers 95.394, Toulouse - GREMAQ.
  21. Leslie McFarland-Marx & Jeroen M. Swinkels, 1993. "Order Independence for Iterated Weak Dominance," Discussion Papers 1040, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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Citations

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Cited by:
  1. Berger, Ulrich, 2007. "Brown's original fictitious play," Journal of Economic Theory, Elsevier, vol. 135(1), pages 572-578, July.
  2. Rene Saran & Roberto Serrano, 2010. "Ex-Post Regret Learning in Games with Fixed and Random Matching: The Case of Private Values," Working Papers 2010-11, Brown University, Department of Economics.
  3. Johannes Horner & Julian Jamison, 2003. "Private Information in Repeated Auctions," Levine's Bibliography 666156000000000108, UCLA Department of Economics.
  4. Fernando Louge & Frank Riedel, 2012. "Evolutionary Stability in First Price Auctions," Dynamic Games and Applications, Springer, vol. 2(1), pages 110-128, March.
  5. Johannes Horner & Julian Jamison, 2006. "Private Information in Sequential Common-Value Auctions," Discussion Papers 1422, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  6. Dawid, Herbert, 1999. "On the convergence of genetic learning in a double auction market," Journal of Economic Dynamics and Control, Elsevier, vol. 23(9-10), pages 1545-1567, September.
  7. Saran Rene & Serrano Roberto, 2010. "Ex-Post Regret Learning in Games with Fixed and Random Matching: The Case of Private Values," Research Memorandum 032, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  8. Atanasios Mitropoulos, 2001. "Learning Under Little Information: An Experiment on Mutual Fate Control," Game Theory and Information 0110003, EconWPA.
  9. Berger, Ulrich, 2008. "Learning in games with strategic complementarities revisited," Journal of Economic Theory, Elsevier, vol. 143(1), pages 292-301, November.
  10. Metzger, Lars Peter, 2014. "Invader strategies in the war of attrition with private information," Journal of Mathematical Economics, Elsevier, vol. 50(C), pages 160-166.
  11. Holzman, Ron & Kfir-Dahav, Noa & Monderer, Dov & Tennenholtz, Moshe, 2004. "Bundling equilibrium in combinatorial auctions," Games and Economic Behavior, Elsevier, vol. 47(1), pages 104-123, April.
  12. Hailu, Atakelty & Schilizzi, Steven & Thoyer, Sophie, 2005. "Assessing the performance of auctions for the allocation of conservation contracts: Theoretical and computational approaches," 2005 Annual meeting, July 24-27, Providence, RI 19478, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  13. Mitropoulos, Atanasios, 2001. "Learning under minimal information: An experiment on mutual fate control," Journal of Economic Psychology, Elsevier, vol. 22(4), pages 523-557, August.

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