The higher the bid in a first-price auction,the ________ will be the chances of winning and the ________ the surplus earned.

Question

Quizplus · Accepted Answer

In a first-price auction, the highest bidder wins but pays the amount of their bid. So, if the bid is higher, the chances of winning are higher as well. However, the surplus earned (the difference between the value of the item and the price paid) will be lower because the bidder will have to pay more for the item.

The Higher the Bid in a First-Price Auction,the ________ Will