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That's not entirely correct. The theorem says that in Vickrey auctions (sealed bid 2nd price), each bidder's optimal strategy is to bid their actual valuation o
by Beldin 5y ago
That's not entirely correct.
The theorem says that in Vickrey auctions (sealed bid 2nd price), each bidder's optimal strategy is to bid their actual valuation of the auctioned object.
It doesn't work with open bidding, because then you could bid artificially much as long as the 2nd highest bid was at your real valuation or below.
- bennysomething 5y agoIs there anything in game theory related to this? (Very naive question, so probably not) But yes my intuition when selling my house was "surely I'd get more if this was open bids"
- jefftk 5y agoSorry, that's not the theorem I'm referencing. See the section "Revenue equivalence of the Vickrey auction and sealed first price auction". (Or https://en.wikipedia.org/wiki/Revenue_equivalence https://en.wikipedia.org/wiki/Revenue_equivalence)