Multiplicative Bidding and Convergence to Equilibrium

Authors

Richard Engelbrecht-Wiggans

Document Type

Discussion Paper

Publication Date

10-1-1978

CFDP Number

500

CFDP Pages

16

Abstract

General equilibrium strategies may be relatively difficult to determine. While multiplicative strategies may be much simpler to calculate, they are not in general in equilibrium. An example shows that such strategies may indeed be quite far from equilibrium. However, if the example is iterated using Bayesian decision analysis, the strategies quickly converge to being very nearly in equilibrium.

Recommended Citation

Engelbrecht-Wiggans, Richard, "Multiplicative Bidding and Convergence to Equilibrium" (1978). Cowles Foundation Discussion Papers. 734.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/734