11: First-Price Sealed-Bid Auctions Flashcards
1
Q
What is a sealed-bid auction ?
A
An auction which accepts only privately submitted bids that are ranked by the auctioneer
2
Q
What is a all-pay sealed-bid auction ?
A
The bidder with a highest bid wins and everyone else pays their bid.
3
Q
What is a first price sealed-bid auction ?
A
The bidders privately submit their bids, e.g. write on a piece of paper and post in sealed envelopes.
The auctioneer opens the bids and ranks them.
The bidder with a highest bid wins and pays their bid, strategically equivalent to the Dutch auction.
4
Q
What is the best strategy for a first price sealed-bid auction ?
A
Bid less than your own valuation.
