If a good is sold in a Dutch auction and the bidders bid rationally, the price paid for the good will always be equal to the second-highest willingness to pay of auction participants.

Question

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In a Dutch auction, the auctioneer starts with a high asking price which is lowered until some participant is willing to accept the auctioneer's price. The first person to bid wins the item at that price, which does not necessarily reflect the second-highest willingness to pay among all participants.

If a Good Is Sold in a Dutch Auction and the Bidders