Asked by Shaffer Davis on Sep 24, 2024
Verified
First-price auctions have all the following properties EXCEPT
A) Highest bid wins
B) Highest bidder pays the second highest bid
C) The item is won by the highest bidder
D) The price is set to the highest bid
First-Price Auctions
An auction format in which the highest bidder wins and pays the amount of their bid.
Highest Bid
The largest amount of money offered in a competitive process, such as an auction, for the purchase of goods or services.
Second Highest Bid
In an auction, the bid amount that is the next highest after the winning or highest bid.
- Gain insight into the theory and consequences of sealed versus open auction mechanisms.
Verified Answer
IA
ikhwan azman1 day ago
Final Answer :
B
Explanation :
In a first-price auction, the highest bidder wins the auction and pays the actual amount they bid, not the second highest bid. Therefore, option B is incorrect, while options A, C, and D are all correct.
Learning Objectives
- Gain insight into the theory and consequences of sealed versus open auction mechanisms.