Second Price Auctions - Duplicate Bids and Attracting Bidders In a second price auction, what occurs if two bidders bid the exact same amount on a non-divisible item. For instance, let's say these are the bids for object A: Bidder W - $9.00 Bidder X - 11.00 Bidder Y - 11.00 Bidder Z - 10.00 Who has won this auction and what price do they pay? Also, let's look at a somewhat similar scenario. Here are the bids for object A: Bidder W - $9.00 Bidder X - 10.99 Bidder Y - 11.00 Bidder Z - 10.98 Here Bidder Y has won the auction but will end up paying almost the exact same amount as their original bid. I would imagine that neither Bidder X or Bidder Y would be very satisfied with the outcome of the auction and would be unlikely to return in the future.

You would have to check the rules, but the sensible thing to do in the first case is flip a coin and sell to either X or Y at 11. It is like one or the other bid $11-\epsilon$. If the bids are sequential I think you would award it to the first to bid $11$ (and usually not accept the next bid unless it was greater than $11$)

You are right that the second case is very similar. There may be a minimum increment for a bid, which your example indicates is 0.01. If more than one bidder have very similar values for the item this is what happens. The idea is that each bidder is encouraged to bid his true value. If they did that, Y is making a profit (true, of only 0.01). X can now bit 11.01, but then would take a loss of 0.02 if the 10.99 bid were truthful. Y may be disappointed, but that's life.