Believing in correlated types in spite of independence: An indirect evolutionary analysis

C-Tier
Journal: Economics Letters
Year: 2015
Volume: 134
Issue: C
Pages: 1-3

Score contribution per author:

0.503 = (α=2.01 / 2 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

The risk-neutral equilibrium bidding strategy for first-price auctions with independent private values is justified without assuming a well-defined Bayesian game. Bidders, aware of their own value, assume the private values to be linearly related. The latter, however, are independent and identically distributed, and this is only known by Nature. Allowing for arbitrary linear common value beliefs, and assuming optimal bidding for such beliefs we derive the unique evolutionarily stable conjectural belief and justify risk neutral bidding in a new and hopefully innovative way.

Technical Details

RePEc Handle
repec:eee:ecolet:v:134:y:2015:i:c:p:1-3
Journal Field
General
Author Count
2
Added to Database
2026-01-25