Level-k Auctions: Can Boundedly Rational Strategic Thinking Explain the Winner's Curse and Overbidding in Private-Value Auctions?
This paper proposes a structural nonequilibrium model of initial responses to incomplete-information games based on “level-k” thinking, which describes behavior in many experiments with complete-information games.We derive the model’s implications in first- and second-price auctions with general inf...
| Main Authors: | , |
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| Format: | Journal article |
| Language: | English |
| Published: |
Econometric Society
2007
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