Auctions with an Inexpert Bidder
UIUC Dept. Economics Working Paper 00-0100
15 Pages Posted: 16 Nov 2000
Date Written: January 2000
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.
JEL Classification: D44
Suggested Citation: Suggested Citation