Private-Value, Sealed-Bid Auction
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- A group of bidders participates in an auction for a painting
- Each submits his bid without knowing the bids of the others
- Highest bidder receives the painting and pays his bid
- Your screen displays:
- the range of possible bidder values for the item;
- your value for the item;
- Use the slider to choose a bid amount, then click Bid to submit the bid
- For the winning bidder: Payoff = His Value of the Painting - His Bid
- For all other bidders: Payoff = 0
- 6 bids submitted: $11, $13, $14, $20, $22, and $23
- Participant bidding $23 values the item at $62
| Payoff |
= |
Value |
– |
Bid |
| $39 |
= |
$62 |
– |
$23 |