Theoretical Approaches to Lowest Unique Bid Auctions

Miguel Costa-Gomes, Makoto Shimoji

Research output: Working paper

Abstract / Description of output

In this paper, we analyze a game called the lowest unique bid auction (LUBA). It is known that there is no closed form solution for the symmetric mixed strategy equilibria in LUBA. We propose two alternative approaches. We use weak dominance to identify upper bounds for players' bids. Under symmetry, we provide a method to compute a mixed strategy equilibrium by utilizing the recursive structure of the winning chances of the bids under one assumption.
Original languageEnglish
Publication statusPublished - 26 Aug 2013

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