Strategy in the Real World · Designing games
Auctions
How to bid and how to design auctions. English, Dutch, first-price and second-price (Vickrey) formats, why truthful bidding is optimal in a second-price auction, bid shading, revenue equivalence, the winner's curse, and the Nobel-winning spectrum auctions.
Step 1 of 6 · Overview35 min read ·
Key idea
Prereqs: Nash equilibrium; Bayesian games; Expectation (Math). Next: Mechanism design. Sources: Vickrey (1961), Milgrom's *Putting Auction Theory to Work*, Stanford's Milgrom & Wilson 2020 Nobel talk.Next: 1. Formats