<p>A speculative bid in a Vickrey auction means that it is not what the bidder really thinks that the product is worth. Hence, a speculative bid is anything different from the true valuation of this product by the bidder (either a smaller or a larger price than the true one).</p>

<p>In a Vickrey auction, the bidder has incentive to reveal his/her true valuation. If he/she does not do so, he/she risks losing (either by winning the bid and paying more than what the product is worth for them - if price was higher than true valuation -, or by losing the bid - if price was lower than true valuation).</p>

CC BY-SA 3.0
2017-11-04T22:38:10.580Z
2017-11-04T22:38:10.580Z
python_enthusiast
<p>I tried to look for this term on the Internet, to no avail, as what I found does not fit into the context I found this word in.</p>

<p>My context is:
The incentive-compatible instrument of Vickrey Auction is that there is no incentive for bidders to submit speculative bids.</p>

<p>What does "speculative bid" mean here?</p>

<p>Thanks in advance.</p>

CC BY-SA 3.0
2017-11-04T16:14:39.947Z
This context does not appear anywhere on the internet. Can you please name its source or provide a link to it?
Giskard
CC BY-SA 3.0
2017-11-04T17:59:28.577Z
Actually it is from a script of my professor.
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<auctions>
What does speculative bid mean?
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# What does speculative bid mean?

(Asked by: username_0 on 2017-11-04)

I tried to look for this term on the Internet, to no avail, as what I found does not fit into the context I found this word in.

My context is:
The incentive-compatible instrument of Vickrey Auction is that there is no incentive for bidders to submit speculative bids.

What does "speculative bid" mean here?

Thanks in advance.

**Tags:** auctions
> **Comments:**
> **username_1**: This context does not appear anywhere on the internet. Can you please name its source or provide a link to it?  
> **username_0**: Actually it is from a script of my professor.  

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## 1 answers

### Answer by username_2 on 2017-11-04. Score: 2 | Accepted answer

A speculative bid in a Vickrey auction means that it is not what the bidder really thinks that the product is worth. Hence, a speculative bid is anything different from the true valuation of this product by the bidder (either a smaller or a larger price than the true one).

In a Vickrey auction, the bidder has incentive to reveal his/her true valuation. If he/she does not do so, he/she risks losing (either by winning the bid and paying more than what the product is worth for them - if price was higher than true valuation -, or by losing the bid - if price was lower than true valuation).


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