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?