Appendix: Sealed bids can be used in multiple rounds.How is this done?
A) The winner of the first round automatically wins all future rounds.
B) The winner's price in the first round is the reservation price in the next round.If higher prices come in the next round,the highest price is the new reservation price for round three,and so forth.
C) The second best price in the first round is the winner.
D) Bidding continues in more and more rounds until someone yells "uncle."

Question

Quizplus · Accepted Answer

In multiple round sealed bids, using the winner's price as the reservation price for the next round can help ensure that the bids remain tethered to the actual value of the item being auctioned off. This allows for fair competition and ensures that the auction is not won by someone who is overpaying for the item.

Appendix: Sealed Bids Can Be Used in Multiple Rounds