[ineedasername]

But given the lack of information, a person might reasonably try to make educated guessed about other people's bids. And often enough there's not one price a person has, it's more of a range. The combination complicates the thought process: A person might think anything over $100 would put them out of the running, but is willing to accept as little as $60. Their goal is to maximize their price within that range. Then it's not as simple as choosing your "true" price, the thought process is about choosing the highest price within your range that you believe is less than someone else's. I guess you might say any price within the range is a "true" price, but it does complicate the optimal strategy to include a bit more thought than just a single value.

[jackcarter]

If I'm willing to accept as little as $60, then I should bid $60. If someone else bids $1000, then I get $1000. I don't do any better by anticipating their bid and inflating my own bid to $999. If they bid $61, I get $61, and because I value not-having-Facebook at $60, that means I get $1 of surplus value.

Anyone bidding higher than their minimum price doesn't fully understand the second-price auction. Probably lots of people don't understand it, which could lead to inflated bids. (but that doesn't mean you, knowing better, should inflate your own bid!)

[ineedasername]

ah, never mind then, I get it. I was thinking about backwards, or maybe sideways, but either way not right side up. Thanks for the explanation.