Equilibrium strategy and population-size effects in lowest unique bid auctions.

@article{Pigolotti2012EquilibriumSA,
  title={Equilibrium strategy and population-size effects in lowest unique bid auctions.},
  author={Simone Pigolotti and Sebastian Bernhardsson and Jeppe Juul and Gorm Galster and Pierpaolo Vivo},
  journal={Physical review letters},
  year={2012},
  volume={108 8},
  pages={
          088701
        }
}
In lowest unique bid auctions, N players bid for an item. The winner is whoever places the lowest bid, provided that it is also unique. We use a grand canonical approach to derive an analytical expression for the equilibrium distribution of strategies. We then study the properties of the solution as a function of the mean number of players, and compare them with a large data set of internet auctions. The theory agrees with the data with striking accuracy for small population-size N, while for… 

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