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Vickerey

Suppose someone is selling some object in the following (kind of unusual) way. Everyone who wants to buy the object writes down a number. The person who wrote the highest number gets to buy the object, but gets charged the second highest number. All player's have a private value from the object, which is random.

Suppose that your value for the object is v.

1. Would you ever bid more than v regardless of how the other players bid? Explain.
2. Would you ever bid less than v regardless of how the other players bid? Explain.
3. What will happen in this auction?

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Vickerey is exhibited.

$2.19