Least-Unmatched Price Auctions have become a popular format of TV and radio shows. Increasingly, they are also applied in internet trading. In these auctions the lowest single (unique) bid wins. We analyze the game-theoretic solution of least unmatched price auctions when prize, bidding cost and the number of participants are known. We use a large data-set of such auctions in order to contrast actual behavior of players with game-theoretic predictions. In the aggregate, bidding behaviour seems to conform with a Nash equilibrium in mixed strategies.
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Paper provided by University of Heidelberg, Department of Economics in its series Working Papers with number
0471.
Find related papers by JEL classification: C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
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