In a Dutch auction with perfect information, the winner of the auction is the bidder who values the object:
A) Least and pays what the object is worth to the highest bidder less the bidding increment.
B) Most and pays what the object is worth plus the bidding increment.
C) Most and pays what the object is worth to the next highest bidder plus the bidding increment.
D) Least and Pays what the object is worth to the highest bidder less the bidding increment.
E) None of the above are correct.

Question

Quizplus · Accepted Answer

In a Dutch auction with perfect information, the winner is indeed the bidder who values the object the most. However, the payment is typically made at the price of the second-highest bid plus a bidding increment, if applicable, to encourage truthful bidding. This ensures that the winner pays slightly more than what the item is worth to the next highest bidder, aligning with choice C.

In a Dutch Auction with Perfect Information, the Winner of the Auction