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S2E2 - Cailin Slattery, Bidding for Firms

Densely Speaking

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How Does the Auction Model Work?

A key feature here is that firms are trying to get the best deal. That means this combination of profits plus, you know, whatever subsidies tayre getting. And on the side, right, states have different valuations for that new establishmentt and so georgia might value that new autoplant for like a hundred million dollars, but alabama might have a 200 million dollar value on that. The auction model is going to allow you to recover those different valuations as well as parameters in the firm's problem? Yes, exactly.

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