(AGT10E4) [Game Theory] Solving Vickrey (Second Price) Auction: Weakly Dominant Strategy Equilibrium

[@hongyuduan6811]

The matrix really helps me understand the argument! Thx!

[@elenarick-spearman9800]

That was super helpful thank you very much!

[@myduong7219]

Thank you so much! This lesson is super helpful!

[@aliabdollahi347]

thank you it was wonderfull

[@hudzaifilhazen4329]

So in your conclusion, in the second price auction, is it each player has a weakly dominants strategy or only the player with the highest valuation has a weakly dominant strategy> thank you

[@minhcao4328]

each player

[@yarenkaya7872]

Well, what complicates the second-bid auction is that assume one has a valuation Sj > Si. Normally s/he is expected to bid Sj as it seems to be the weakly dominating strategy. Yet, if player i bids bi > Sj > Si; then player j has no choice to win the bid and may bid Sj or not. If not bidding would be the choice of the other players having a valuation more than Si, then and not bidding their true valuation, it would change the h, here. Then it would be probable that the h column shifts to the values on the right. Then, player i may get a positive utility even though s/he is not the one who values more yet can bid higher but pays less.