In common value auctions
A)Every bidder know the value of the object being sold
B)Each bidder makes the same estimate of the value of the good
C)All bidders know the estimates of the others
D)The true value of the item is unknown to bidders

Question

In common value auctions​
A)​Every bidder know the value of the object being sold
B)Each bidder makes the same estimate of the value of the good
C)All bidders know the estimates of the others
D)​The true value of the item is unknown to bidders

Quizplus · Accepted Answer

In common value auctions, the true value of the item being auctioned is unknown to the bidders. Although bidders may have their own estimates of the value, these estimates can differ from one another because of differences in information, expertise, or analysis. Therefore, bidders may face uncertainty about the accuracy of their estimates, which can lead to strategic behavior and risk management.

In Common Value Auctions​

In Common Value Auctions