Abstract
In this paper we provide an introduction to the theory of auctions of a single object. For the private-values independent-signals model we show that the four types of auctions - first and second-price scaled-bid auctions, English and Dutch auctions - generate the same revenue. We also show that the revenue equivalence thcorem holds when values are common. Further, we show that the winner's curse (a situation where the winner in a first-price sealed-bid auction can pay a price higher than the true value of the object) is not consistent with Nash behavior. That is, the winner's curse is a result of suboptimal strategies. Finally, we argue that when signals are statistically dependent, the revenue equivalence theorem breaks down.
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