With common values in an auction:
A)each bidder has his own personalized valuation of an object.
B)no bidder knows how much the object is worth to the other bidders.
C)the object has the same value to all bidders.
D)individuals are likely to have idiosyncratic assessments of the value of the object.

Question

Quizplus · Accepted Answer

With common values in an auction, the object has the same value to all bidders. This means that all bidders have the same assessment of the object's value and will bid accordingly. It is different from private values, where each bidder has their own personalized valuation of the object. In common values, bidders may still have idiosyncratic assessments, but the object itself is of the same value to all of them. With common values in an auction, the value of the object is the same for all bidders. This is different from private values where each bidder has their own personalized valuation of the object.

With Common Values in an Auction