Interesting. I had the Nash equilibrium in mind, but it’s true that unlike a dollar auction, you can de-escalate, and when you take into account how your opponent will react to you changing your strategy, doing so becomes viable. But then you end up with something like a game of chicken, where ideally, you want to force your opponent to de-escalate first, as this tilts the outcomes toward option C rather than B.
Interesting. I had the Nash equilibrium in mind, but it’s true that unlike a dollar auction, you can de-escalate, and when you take into account how your opponent will react to you changing your strategy, doing so becomes viable. But then you end up with something like a game of chicken, where ideally, you want to force your opponent to de-escalate first, as this tilts the outcomes toward option C rather than B.