Toward a study of bidding processes, part II: Games with capacity limitations

This paper is the second of a series on bidding. A previous paper (published in Mar., 1963 issue of NRLQ) considered bidding situations formulated as two‐person constant‐sum games; this article is devoted to the important case of non‐constant‐sum bidding models involving two participants. Following an introduction on solution concepts, the single‐shot bid is analyzed, both for the case of no penalty in the case of a tie, and for the case of a penalty. The majority of the paper is then devoted to a study of bidding on a sequence of jobs, using three different assumptions about the amount of information revealed after the award of each job. They are, respectively, the super‐silent bid, where no information is given; the silent bid, where only the name of the winner is announced; and the noisy bid, where complete information is given. The analysis is primarily a study of equilibrium solutions under each assumption. What is shown is that, in passing from one type of bid to a second in which more information is given, new families of equilibrium solutions are added, and existing families become more extensive.