An Example of a Good That Is Both Rival and Excludable

question 195

Multiple Choice

An example of a good that is both rival and excludable is

• A) the defense services provided by a new stealth bomber.
• B) a pair of pants.
• C) a beautiful sunset.
• D) an uncrowded theme park such as Walt Disney World.

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Definitions:

Winner's Curse

A situation in which the winner of an auction ultimately overpays or incurs a loss because of overly optimistic valuation of the asset bid on.

Optimistic Estimate

A projection or forecast that assumes the most favorable conditions and outcomes for a given situation.

Bid Shading

A strategy where a bidder offers a lower price than what they are actually willing to pay, often used in auctions to acquire items at a lower price.

Winner's Curse

A phenomenon that occurs in common value auctions, where the winner tends to overpay due to incomplete information, leading to regret.