If the bidders at a second-price auction have true values of $8,$7,$6,and $5,the item will sell for
A)$8
B)$7
C)just over $7
D)just under $7

Question

​If the bidders at a second-price auction have true values of $8,$7,$6,and $5,the item will sell for
A)​$8
B)$7
C)just over $7
D)​just under $7

Quizplus · Accepted Answer

In a second-price auction, the winner is the bidder with the highest true value but only pays the second-highest bid. In this case, the highest true value is $8, but the second-highest bid will be $7. Therefore, the item will sell for $7.

​If the Bidders at a Second-Price Auction Have True Values

If the Bidders at a Second-Price Auction Have True Values