Asked by Tarek Elshafey on Sep 24, 2024
Verified
In a common-value auction
A) Every bidder knows the exact value of the item being auctioned
B) Each bidder knows everyone else's value of the item
C) The value of the item is different for all the bidders
D) None of the above
Common-value Auction
An auction format where the item for sale has essentially the same value to all bidders, but the exact value is unknown until after the purchase.
Exact Value
The precise numerical quantity or measurement of an item or variable, often crucial in calculations or analyses.
Bidders
Individuals or entities that offer a price for goods or services, especially at auctions.
- Gain insight into the idea of common value auctions and how they diverge from private value auctions.
Verified Answer
LP
Lauryn Porterabout 17 hours ago
Final Answer :
D
Explanation :
In a common-value auction, the actual value of the item being auctioned is the same for everyone, but not all bidders may have the same information or estimate about that value, which means options A, B, and C are incorrect descriptions of a common-value auction.
Learning Objectives
- Gain insight into the idea of common value auctions and how they diverge from private value auctions.