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Auctions Are Psychological Mechanisms
- Auctions are as much psychological as economic, shaping behavior beyond pure value calculation.
- Different auction formats change bidders' incentives and emotions, influencing final prices.
Learn Auction Types And Strategies
- Learn the four main auction types: first-price sealed, second-price (Vickrey), English, and Dutch.
- Match strategy to format since bidding behavior and payment rules differ significantly between them.
Use Collective Leverage To Limit Bids
- When weaker parties face an auction, consider organized collusion to limit overspending.
- Cities could have coordinated to prevent wasting taxpayer money while still letting one win Amazon's HQ bid.