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Auctions with an inexpert bidder. (English) Zbl 0983.91022
Summary: 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.
MSC:
91B26 Auctions, bargaining, bidding and selling, and other market models
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