Auctions Example

The world of NFTs is perhaps the most visible part of the crypto ecosystem, and it is one where auction theory is on full display. We cover a number of topics within auction design, which has applications throughout the crypto ecosystem.

Winner's curse -- the winner of an auction is the agent who pays the most, and as a result, ends up most likely paying more than the true price of the item

Auction types -- compare English auction, Dutch auction, etc, and prove revenue equivalence despite auction design.

Keynesian beauty contest - compare trades made when agents are making valuations based on what the median agent is likely to estimate. Has applications to startup valuations, and therefore DAOs and NFTs.