Boundedly rational bidding decision for land auctions during the transformation of real estate markets.

ABSTRACT: Real estate developers in China exhibit different boundedly rational behaviors when bidding in different land auction formats, resulting in deviation from fully rational bidding, and the transformation of China's real estate industry has intensified this deviation. To address this problem, this study establishes a reference utility model and a subjective decision probability model under the framework of incomplete information game to characterize developers' utility distortion and winning probability distortion in open-bid auctions and sealed-bid auctions for land, respectively. The results show that the deviation between bounded rational bidding and fully rational bidding increases as developer competition intensifies. The equilibrium bidding of cost-disadvantaged developers in the bounde

SUBMITTER: Liao R 

PROVIDER: S-EPMC10492829 | biostudies-literature | 2023 Sep

REPOSITORIES: biostudies-literature