16 Feb 2022
A new Python lecture on first- and second-price sealed-bid auctions of a single good has been added. The lecture sets up and solves for an agent’s optimal bid given their valuation, and proves with a numerical example that the Revenue Equivalence Theorem holds — that is, the expected revenue of both types of auctions are equal. In the case where closed form solutions cannot be found, the lecture provides a method to simulate an agent’s optimal bidding strategy. A subsequent lecture on multiple good auctions relaxes the single-good assumption and considers a simultaneous, multiple-good, ascending-price auction.
Published by: Natasha Watkins