Abstract
The paper extends a class of linear learning models for a response continuum to a repetitive two-person auction. Pairs of subjects bid against each other on successive trials for prizes whose values were determined stochastically. Three experimental groups of 10 subject-pairs were used, the groups being differentiated by the variance of the prize values. Results indicated that (a) mean asymptotic bids were slightly lower than the mean of the prize values, and (b) response variances were in accordance with model predictions. The implications of the data for the structure of the model were also considered. The results support the use of certain random variables rather than constants as coefficients in the basic linear difference equation of the model.
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