AJAE Appendix: Willingness to Pay Versus Expected Consumption Value in Vickrey Auctions for New Experience Goods

(A8) Bid2 = π v₂-α + l-ττ v₂+α.

Second, if v_χ-p_χ=γ, we ~w>₂, we have that F < 0. This gives the following optimal bid

from equation (15):

(A9) Bid2 = π v₂-a + l-π v₂+a .

Third, when r approaches ∞, we have that IimF can be both positive and negative. This
r—>∞

gives the following optimal bid from equations (14) and (15):

(A10) limBidl = π v₂-a + l-ττ v₂+a .
r→∞

Fourth, if TT = O, we have that F > O. This gives the following optimal bid from equation

(14):

(A11) Bid2 = π v₂-a + l-π v₂+a =v₂+a.

Fifth, if π = 1, we have that F < O. This gives the following optimal bid from equation (15):

(A12) Bid2 = π v₂-a + l-π v₂+a =v₂-a.

Sixth, if a = O, then either π = O or π = 1. In both cases, Bid 2 = v₂.

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