eBay’s Recommendation: It is hard to imagine that anyone is not familiar with eBay, the most popular auction web site by far. In a typical eBay auction a good is placed for sale, and each bidder places a "proxy bid," which eBay keeps in memory. If you enter a proxy bid that is lower than the current highest bid, then your bid is ignored. If, however, it is higher, then the current bid 4.5 Exercises . 77 increases up to one increment (say, $0.01) above the second highest proxy bid. For example, imagine that three people have placed bids on a used laptop of $55, $98, and $112. The current price will be at $98.01, and if the auction ended the player who bid $112 would win at a price of $98.01. If you were to place a bid of $103.45 then the player who bid $112 would still win, but at a price of $103.46, while if your bid was $123.12 then you would win at a price of $112.01. Now consider eBay’s historical recommendation that you think hard about the value you impute to the good and that