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

In this episode I solve for the weakly dominant strategy equilibrium of the second price auction.
It's crucial to watch lecture videos in the proper order to ensure effective learning. This is because the concepts in each video build upon those introduced in previous videos. To help you with this, I recommend visiting my website, www.selcukozyurt.com, for a recommended course outline.

[@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.