The Archer in the Mist: The Acquiring-a-Company game and Weak Learning Direction Theory

We analyse the bidding behaviour of buyers in a modified Acquiring-a-Company game allowing for strategic interaction and extensive learning in light of the decisions of the sellers. The benchmark solution, based on risk-neutral players, does not organise the data well. However, we show that the buyers’ choices are consistent with a suitable version of Learning Direction Theory, which we name Weak Learning Direction Theory.