Project SherlockEst. Knowledge

Paper

1961

Counterspeculation, Auctions, and Competitive Sealed Tenders

William Vickrey

Shows that in a sealed-bid second-price auction, bidding one's true valuation is a dominant strategy, founding modern auction theory and explaining why first-price rules invite costly counterspeculation.

Before you start

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Read these first

Not a difficulty warning — a route. These are in the library too.

Theory of Games and Economic BehaviorJohn von Neumann & Oskar Morgenstern, 1944Founds game theory as a mathematical discipline, formalising expected-utility under risk and solving two-person zero-sum games with the minimax theorem before extending the framework to coalitional n-person games.

Groundwork for

Works in the library that name this one as a prerequisite.

Perspectives on Mechanism Design in Economic TheoryRoger B. Myerson, 2007Surveys mechanism design as reverse game theory, showing how the revelation principle lets a designer characterise every social-choice rule implementable once self-interested agents each hold private information.

Filed under Game Theory & Mechanism Design in Economics.