Lying for Strategic Advantage: Rational and Boundedly Rational Misrepresentation of Intentions. .

Starting from an example of the Allies’ decision to feint at Calais and attack Normandy on D-Day, this paper models misrepresentation of intentions to competitors or enemies. Allowing for the possibility of bounded strategic rationality and rational players’ responses to it yields a sensible account of lying via costless, noiseless messages. In some leading cases, the model has generically unique pure-strategy sequential equilibria, in which rational players exploit boundedly rational players, but are not themselves fooled. In others, the model has generically essentially unique mixed-strategy sequential equilibria, in which rational players’ strategies protect all players from exploitation.

A Dual Dutch Auction in Taipei: The Choice of Numeraire and Auction Form in Multi-Object Auctions with Bundling. .

In Taipei we observed a dual Dutch fish auction, like a conventional Dutch auction with bundling, but with reversed roles of price and quantity. We study dual and conventional auctions with symmetric, independent private values, when agents’ utilities are linear in money but strictly concave in fish. With known buyers’ values, conventional and dual auctions, English or Dutch, are equivalent. With values known to buyers but not the seller, the seller prefers conventional auctions. With private values, the seller can prefer a dual Dutch or a conventional English or Dutch auction, but prefers all three to a dual English auction.