Question: In Application 12.1, you learned that, in a second-price auction, bidding your true valuation weakly dominates all other strategies. You also learned that the same

In Application 12.1, you learned that, in a second-price auction, bidding your true valuation weakly dominates all other strategies. You also learned that the same principle applies to proxy bidding on eBay. And yet, experience shows that when eBay bidders submit proxy bids, later in the same auction they often submit higher bids. Why do you think that occurs?

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