Auction Math: First-Price, Second-Price, Reserve Prices & the Winner's Curse
Who wins and who pays in English, Dutch, first-price and Vickrey auctions, expected revenue from order statistics, optimal bid shading, revenue equivalence, reserve prices, the winner's curse, search-ad GSP auctions and procurement bidding, all with a fictional auction house in a live spreadsheet that checks every cell. Educational only, not business, legal or investment advice.
The first lesson is free — no account needed.
About this course
An auction theory course that works through the auctions of one fictional online auction house for used equipment, Gavelry, in a spreadsheet, for economics and business students, e-commerce and procurement staff, ad buyers and anyone who bids. You work out who wins and who pays under first-price sealed-bid, Vickrey and English clock rules, calculate expected revenue from order statistics for 2 to 7 bidders, confirm that bidding (n − 1) ÷ n of your value maximises expected profit in a first-price auction, check revenue equivalence across three rule books, find the reserve price that maximises expected revenue in a chart, measure the winner's curse in common-value auctions, price ad positions in a generalised second-price auction with quality scores, and pick the bid with the highest expected profit in a reverse auction. Educational only, not business, legal or investment advice. The first lab is free.
Lessons
- Auction Formats: Who Wins and Who Pays (English, Dutch, First-Price, Vickrey)Free
- Expected Revenue with Uniform Values: Order Statistics Pro
- Optimal Bid Shading in First-Price Auctions: (n − 1) ÷ n × Value Pro
- Revenue Equivalence: First-Price, Second-Price and All-Pay Side by Side Pro
- Reserve Prices: Expected Revenue over Reserve Levels (Chart) Pro
- The Winner's Curse: Common Values and Estimate Errors (Chart) Pro
- Ad Auctions: Generalised Second Price, Quality Score and the Best Position Pro
- Bidding in Procurement (Reverse) Auctions: Margin vs Win Probability Pro