In a sealed bid auction, the optimal bid for the bidder with the highest reservation price would be [...]. For this reason, bids are not necessarily equal to bidders' reservation prices.
Answer
just slightly above that of the bidder who values the item second-most highly
In a sealed bid auction, the optimal bid for the bidder with the highest reservation price would be [...]. For this reason, bids are not necessarily equal to bidders' reservation prices.
In a sealed bid auction, the optimal bid for the bidder with the highest reservation price would be [...]. For this reason, bids are not necessarily equal to bidders' reservation prices.
Answer
just slightly above that of the bidder who values the item second-most highly
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Parent (intermediate) annotation
Open it In a sealed bid auction, the optimal bid for the bidder with the highest reservation price would be just slightly above that of the bidder who values the item second-most highly. For this reason, bids are not necessarily equal to bidders' reservation prices.
Original toplevel document (pdf)
owner: iamcfa - (no access) - 2015 CFA Level 1 Study Schweser Book 2 - Economics, p18
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