When each bidder in an auction knows what the item is worth to that bidder,but does not know the valuations of other bidders,the auction exhibits:

Question

Quizplus · Accepted Answer

In a private values auction, each bidder has private information about their own valuation for the item being auctioned, but does not have any information about the valuations of other bidders. This is distinct from a common values auction, where each bidder has the same information about the item's value (e.g. an oil drilling lease), but may differ in their interpretation of that value. Therefore, option C is the best choice for the given scenario.

When Each Bidder in an Auction Knows What the Item