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The optimal strategy for a risk-neutral bidder in a second-price, sealed-bid auction with independent private values is to bid:
a. Slightly less than his or her valuation
b. slightly higher than his or her valuation.
c. his or her true valuation.
d. none of the statements are correct.

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Each bidder should place an offer based on their truthful assessment of the good in a sealed-bid 2nd auction with ongoing bidding for an unique, indivisible good.

What happens during a second-price auction?

The top bidder still receives the ad impression in a two - thirds auction model, but not at the expense of the opening bid in real-time bidding. The ultimate price is typically less than the highest bid because the highest bidder only pays the sum that the third bid offered plus $0.01.

Efficacy of second price auction.

Vickrey demonstrated that a second-price bid (see Section 2) is an effective method if a seller does have a single separable good for sale; the winner is indeed the buyer whose

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