COWLES FOUNDATION FOR RESEARCH IN ECONOMICS
AT YALE UNIVERSITY

Box 208281
New Haven, CT 06520-8281

COWLES FOUNDATION DISCUSSION PAPER NO. 500

"Multiplicative Bidding and Convergence to Equilibrium"

Richard Engelbrecht-Wiggans

October 1978

General equilibrium strategies may be relatively difficult to determine. While multiplicative strategies may be much simpler to calculate, they are not in general in equilibrium. An example shows that such strategies may indeed be quite far from equilibrium. However, if the example is iterated using Bayesian decision analysis, the strategis quickly converge to being very nearly in equilibrium