Asked by Aa'Kyra Rivers on Jul 09, 2024
Verified
In common value auctions
A) Every bidder know the value of the object being sold
B) Each bidder makes their own estimate of the value of the good
C) All bidders know the estimates of the others
D) The true value of the item differs across bidders
Common Value Auctions
Auctions in which the item for sale has a single, unknown value to all bidders, leading to challenges in valuing the item correctly.
True Value
The accurate or genuine worth of an item or entity, reflecting its utility, market conditions, and inherent qualities.
Bidders
Individuals or entities that offer a price for goods, services, or assets in an auction or tender process, competing to make the purchase.
- Apprehend the concept underlying common value auctions and how it stands distinct from private value auctions.
Verified Answer
SD
STEVEN DJAJAJul 11, 2024
Final Answer :
B
Explanation :
In common value auctions, each bidder makes their own estimate of the value of the good based on their own information and analysis. However, the true value of the item may differ across bidders due to differences in information, analysis, or other factors.
Learning Objectives
- Apprehend the concept underlying common value auctions and how it stands distinct from private value auctions.