Optimal constrained bidding (Q1087118): Difference between revisions
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scientific article
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English | Optimal constrained bidding |
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Optimal constrained bidding (English)
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1987
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Consider a bidder who, subject only to a constraint on his choice of bidding strategy, will choose a strategy that maximizes his expected gross receipts. The bidder's choice of strategy may be constrained by an upper limit on exposure, an upper limit on expected expenditures, or a lower limit on expected profits. We prove that constraining the bidder only by an appropriate upper limit on expected expenditures in effect limits him to expected profit maximizing strategies; in many examples, expected profit maximizing strategies cannot be induced by solely limiting the bidder's exposure.
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optimal constrained bidding
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limits
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expected profit maximizing strategies
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