Abstract
We consider an auction in which the behavior of one potential bidder departs mildly from full rationality. We show that the presence of such an inexpert bidder can be enough to discourage all of an infinitely large population of fully rational potential bidders from entering an auction. Furthermore, this departure from full rationality does not reduce the inexpert bidder's payoff.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 35-42 |
| Number of pages | 8 |
| Journal | Economics Letters |
| Volume | 73 |
| Issue number | 1 |
| DOIs | |
| State | Published - Oct 2001 |
Keywords
- Auctions with entry
- Bounded rationality
- Common value auctions
- D44 (Auctions)
ASJC Scopus subject areas
- Economics and Econometrics
- Finance