The Theory of Bidding

The Theory of Bidding explores how individuals or companies decide how much to offer in competitive situations, like auctions or negotiations. It involves analyzing factors such as perceived value, strategic behavior, and the actions of others to determine optimal bids. Bidders aim to maximize their chances of winning while minimizing costs, often balancing risk and reward. The theory uses economic and game theory principles to understand how information, expectations, and tactics influence bidding strategies, ultimately shaping outcomes in competitive markets or auctions.