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by traek
1092 days ago
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A key property of a Vickrey auction is that it is incentive compatible, i.e. that it isn't possible to achieve a better expected outcome by bidding something other than your true valuation. Your example relies on the telecom company (or any secondary buyer) not bidding in the auction or bidding only $4. A strictly dominant strategy for the telecom company would be to bid $100k in the auction, winning it for $60k (the second-highest price). |
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