Where does it settle?
Not what happens at these bids — what happens at every other bid too. The reply curves say whether anyone still has a reason to move.
Run with First-price sealed bid. The link below sweeps every bid, not just these ones, and reports the profile nobody wants to leave. Here is what happens at the bids as typed.
| Bidder | Worth to them | Bid |
|---|---|---|
| A | 90 | 60 |
| B | 70 | 50 |
Step by step
- collect bids Each bidder submits one sealed bid; private values are never revealed.
- sort Bids are ranked from highest to lowest. Equal bids keep the order the bidders were listed in, so a tie goes to the first-listed bidder.
60 >= 50
- pick winner The highest eligible bid wins the item.
argmax b_i = A at 60
- price rule The winner pays exactly what they bid, so every unit of bid above the runner-up is money left on the table. That is why bidders shade their bids below their true value here, and why the bids you see are not values.
p = b_i = 60
- payments A pays their own bid of 60; the losers pay nothing.
revenue = 60
How it came out
| Winner | A |
|---|---|
| Price paid by the winner | 60 |
| Seller revenue | 60 |
| Value created | 90 |
| Went to whoever valued it most | yes |
| Bidder | Paid | Ended up with |
|---|---|---|
| A | 60 | 30 |
| B | 0 | 0 |
Open this example in the walkthrough
The link carries the whole setup, so you can change a bid and watch what moves — and send the result to somebody else.