Data-driven bidders in auctions lead to inefficiencies and suboptimal outcomes.
The article explores how novice bidders in auctions can use past data to make decisions, even when they don't have all the information. The researchers found that when bidders rely on this data-driven approach, they may not always make the best choices, especially when there are correlations between signals. This can lead to inefficiencies in various types of auctions, where bidders can only submit one-dimensional bids.