9. Political and Market Applications

First-price Auctions — Quiz

Test your understanding of first-price auctions with 5 practice questions.

Practice Questions

Question 1

What is a first-price auction?

Question 2

What does the winner pay in a first-price auction?

Question 3

If a bidder's value is $80$, they bid $70$, and they win, what is their payoff?

Question 4

What is bid shading?

Question 5

Why do bidders often shade their bids in first-price auctions?