Auction Strategy Lab
Four classic auction formats, one lab. Bidders draw private values at random and compete under the rules you pick: first-price sealed bid, second-price sealed bid (Vickrey), the English ascending clock or the Dutch descending clock. Watch a single auction play out with animated bidder paddles and a moving price, then fire a thousand auctions per format and compare the revenue histograms — the celebrated revenue equivalence theorem in action, and the places where it bends. A shading slider lets you override the equilibrium first-price strategy and see what over- or under-bidding costs, and a common-value mode gives every bidder a noisy signal of one true value, recreating the winner’s curse: the most optimistic estimate wins, and systematically overpays.
Runs 100% in your browser — simulations are computed locally on your device.
Read the full guide to this tool
Notes
- In a first-price auction the equilibrium bid with n bidders and uniform values is v·(n−1)/n — you shade below your value because you only profit when you win, and winning means paying your own bid.
- In a Vickrey (second-price) auction bidding your true value is a dominant strategy: your bid only decides whether you win, never what you pay.
- Revenue equivalence: with risk-neutral bidders and independent private values, all four formats raise the same expected revenue — the histograms share a mean even though their shapes differ.
- The winner’s curse appears when the item has one common value and bidders see noisy signals: the winner is whoever overestimated most, so naive bidding loses money on average and rational bidders shade harder as the field grows.
- Runs 100% in your browser — simulations are computed locally on your device.
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