Optimal Auctions for Partially Rational Bidders

  title={Optimal Auctions for Partially Rational Bidders},
  author={Zihe Wang and Pingzhong Tang},
We investigate the problem of revenue optimal mechanism design [Myerson, 1981] under the context of the partial rationality model, where buyers randomize between two modes: rational and irrational. When a buyer is irrational (can be thought of as lazy), he acts according to certain fixed strategies, such as bidding his true valuation. The seller cannot… CONTINUE READING