Under a second-price sealed-bid auction with private values, each bidder's dominant strategy is to submit a bid equal to their maximum willingness to pay.

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In a second-price sealed-bid auction with private values, each bidder's dominant strategy is to submit a bid equal to their maximum willingness to pay, because even if they win the auction, they will only have to pay the second-highest bid. This is known as the "winner's curse" and incentivizes bidders to bid their true value.

Under a Second-Price Sealed-Bid Auction with Private Values, Each Bidder's