This chapter presents the Independent Private Values model, wherein bidders’ values for the object being auctioned off is a function of only their own types. The equilibrium bidding strategies and seller’s expected revenue in four distinct types of auctions (first- and second-price sealed-bid, English, and Dutch auctions) are computed. It is shown that bidders bid less than their valuations in the unique symmetric of a first-price auction, and bid their valuations in the unique symmetric equilibrium of the second-price auction.
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