The behavior of bidders in an auction is an example of:

The behavior of bidders in an auction is an example of game theory. Game theory is a branch of mathematics and economics that studies strategic interactions among rational decision-makers. In the context of an auction, bidders are participants in a strategic interaction where they make decisions based on the actions and strategies of other participants.

Key elements of game theory in auctions include:

1. Bid Strategies: Bidders must decide how much to bid based on their estimates of the item's value, their expectations of other bidders' behavior, and the auction rules.
2. Auction Formats: Different auction formats, such as English auctions, Dutch auctions, sealed-bid auctions, or Vickrey auctions, involve distinct rules and strategies that bidders consider when participating.
3. Information Asymmetry: Bidders may have varying levels of information about the item being auctioned, and they must strategize based on their own information and beliefs about others' information.
4. Winner's Curse: Bidders need to be aware of the winner's curse, where the winner of an auction may end up paying more than the item's true value.

Understanding the strategic interactions and decision-making processes of bidders in auctions falls within the realm of game theory.