You're the highest bidder, at $10, in a second-price auction for inventory within Display & Video 360. The second-highest bidder bids $6. What will you pay for these impressions as the auction winner?

$10.01

$10.00

$6.01

$6.00


Choose an option to see if it’s correct. Check the explanation below. Learn Smarter, not Harder.

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Explanation: You’re the highest bidder, at $10, in a second-price auction for inventory within Display & Video 360. The second-highest bidder bids $6. What will you pay for these impressions as the auction winner?


Explanation: In a second-price auction model, the winning bidder pays the second-highest bid amount plus a minimal increment, known as the bid increment. The bid increment is usually one cent. In this scenario, since you are the highest bidder with a bid of $10, you will pay slightly more than the second-highest bid, which is $6. Thus, you will pay $6.01 for these impressions as the auction winner. This pricing mechanism encourages bidders to bid their true value for the inventory, as they only pay a marginal amount higher than the next highest bid, promoting fair competition in the auction environment.
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