Auction Formats and Truthful Bidding

Four ways to sell one thing

Private values

Truth-telling in the second-price auction

What the seller should expect

Which format lowers an announced price until a bidder stops the clock?

What defines the private-values setting?

In a second-price auction, why does bidding below your value hurt you?

What does the revenue equivalence theorem claim for the four formats?

Values in a second-price spirit, bidders 100, 80, and 60 for an open English auction. At what price does bidding stop? Write the number.

In a sealed second-price auction with bids 100, 80, and 60, what does the winner pay? Write the number.

In a second-price auction your value is 100 and the second-highest bid is 80. You shade your bid to 75. What happens?

Same setting, value 100, second-highest bid 80. What if you bid 105 instead?

The seller sets a reserve of 90 in the English auction with bidder values 100, 80, and 60. What revenue results?

In the plain English auction with values 100, 80, and 60, what surplus does the winner keep?

With bidder values 100, 80, and 60 and a reserve price of 90, compute the seller's revenue in the English auction, and write the number.

With the reserve of 90 and the top bidder's value of 100, compute the winner's surplus, and write the number.