The result that different auction styles in which the good goes to the winner with the highest valuation of the good generate the same amount of revenue is called
A) Revenue Equivalence Theorem.
B) Marginal Revenue Theory.
C) Auction Revenue Theory.
D) First Bid Revenue Theorem.

Question

Quizplus · Accepted Answer

The result that different auction styles generate the same amount of revenue is known as Revenue Equivalence Theorem. This theorem states that different auction mechanisms, such as sealed bid auctions, ascending bid (English) auctions, and descending bid (Dutch) auctions, will produce the same revenue for the seller if bidders have independent private values for the item being auctioned. Therefore, option A is the correct choice. None of the other options are correct.

The Result That Different Auction Styles in Which the Good