ex2 problem 4

ex2 problem 4

msh5746 16 May 2016 22:27

1. In the example we are required to give, in the case the bidder is cheating (submit multiple bids) he can lie as much as he wants (ant give some allocation not what it is really worth for him). Right?
Also, the utility in this case is calculated as v-p, when v is the value that the (chosen) allocation really worth for him, right?
2. What is the definition of Vickrey auction?
Thanks

Re: ex2 problem 4

TzahiT 17 May 2016 18:32

I'm not Israela BUT:
1. Yes. (Notice he lies in the valuation not in the allocation)
2. It's a second price auction (winner = highest bidder, payment for winner = second highest bid).

Re: ex2 problem 4

Israela 17 May 2016 19:12

I approve, thanks Tzahi