Asked by Khaila Smith on Sep 24, 2024
Verified
If the bidders at a second-price auction have true values of $8,$7,$6,and $5,the item will sell for
A) $8
B) $7
C) just over $7
D) just under $7
True Values
The actual, intrinsic worth or validity of something, not influenced by external factors or perceptions.
Selling Price
The price at which goods or services are sold to consumers.
- Identify the differences in strategic approaches between first-price and second-price auctions.
Verified Answer
ST
saania tasleem1 day ago
Final Answer :
B
Explanation :
In a second-price auction, the winner is the bidder with the highest true value but only pays the second-highest bid. In this case, the highest true value is $8, but the second-highest bid will be $7. Therefore, the item will sell for $7.
Learning Objectives
- Identify the differences in strategic approaches between first-price and second-price auctions.