The table above lists the independent private values of five participants in an auction. Each of the bidders only knows their o value and does not know the private values of the other participants.
-Refer to the table above. Recall that the bidders only know their own private value of the item and they do not know the other participants' private values. Further, assume each participant will submit bids using their optimal strategy. If the participants are bidding in a sealed- bid second- price auction, Bidder _________ wins the auction and pays_______ .

Question

Quizplus · Accepted Answer

In a sealed bid second-price auction, the highest bidder wins but pays the second-highest bid price. Among the five bidders, Bidder 3 has the highest bid of $9.5 million, which is more than the second-highest bid of $9 million by Bidder 5. Therefore, Bidder 3 wins the auction but pays the second-highest price of $9 million.

The Table Above Lists the Independent Private Values of Five