MobLab
Instructions
Aa

# Common Value English Auction

## Auction Rules

• A group of bidders participates in an auction for the oil rights of a field
• There is a true value of the oil, but each bidder only has an estimate of this value
• At any point, you may place a bid higher than the current highest bid
• Auction ends when time runs out: highest bidder wins the oil rights and pays her bid

## How to Play

• Press the Test Drill button to get your estimate of the oil’s value
• the range of values for the true value of the oil;
• amount by which your estimate may differ from the true value.;
• current bids, sorted from highest to lowest.
• Use the slider to choose a bid amount, then click Bid to submit the bid

## Payoff Computation

• For the winner: Payoff = True Value - Final Bid
• For everyone else: Payoff = 0

## Example

• Final bid when time runs out = \$42
• Value Estimate of Final Bidder = \$95
• True Value of Oil in Field = \$87
• Payoff = True Value Final Bid
\$45 = \$87 \$42