You'reentering a second-price auction for sports inventory.You're the highest bidder and bid$5.00.Thesecond-highest bidder bids$4.00.As the auction winner,what will you pay for these impressions?
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Correct answer: $4.01.
Why this is the answer
Inasecond-price auction,the winning bidder pays the amount of the second-highestbid,plus a minimal increment.In this scenario,where you bid$5.00 and the second-highest bid is$4.00,youwillpay$4.01 for the impressions.This pricing model encourages participants to bid the true value they place on the inventory,as the winner only pays slightly more than the second-highestbid.It promotes fair competition and ensures that the winning bidder secures the impressions at a price closely aligned with the market demand.
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