Suppose the U.S. government is auctioning the rights to mine for gold in a government- owned region on the West coast. Gold has been found in areas close to the region to be auctioned and gold has a fixed market price. The value of the rights to mine for gold in this region is an example of_______ .

Question

Quizplus · Accepted Answer

The value of the rights to mine for gold in this region is an example of a common value because the value is based on the potential quantity and quality of gold deposits in the area, which is the same for all bidders. The market price of gold is a known factor, so all bidders have access to the same information regarding the potential value of the rights to mine for gold in this region.