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Buyers with one-level models.

  Each buyer can now keep a history of the qualities it ascribes to the goods returned by each seller. She can, in fact, remember the last N qualities returned by some seller s for some good g, and define a probability density function tex2html_wrap_inline690 over the qualities x returned by s (i.e. tex2html_wrap_inline690 returns the probability that s returns an instance of good g that has quality x). She can use the expected value of this function to calculate which seller she expects will give her the highest expected value.

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The buyer does not need to model other buyers since they do not affect the value she gets.



Jose M. Vidal
jmvidal@umich.edu
Wed Aug 21 07:12:37 EDT 1996