# Wikipedia Authors - Price of Anarchy in Auctions (Highlights) ![rw-book-cover|256](https://readwise-assets.s3.amazonaws.com/static/images/article2.74d541386bbf.png) ## Metadata **Cover**:: https://readwise-assets.s3.amazonaws.com/static/images/article2.74d541386bbf.png **Source**:: #from/readwise **Zettel**:: #zettel/fleeting **Status**:: #x **Authors**:: [[Wikipedia Authors]] **Full Title**:: Price of Anarchy in Auctions **Category**:: #articles #readwise/articles **Category Icon**:: 📰 **Document Tags**:: #game-theory **URL**:: [en.wikipedia.org](https://en.wikipedia.org/wiki/Price_of_anarchy_in_auctions) **Host**:: [[en.wikipedia.org]] **Highlighted**:: [[2020-04-26]] **Created**:: [[2022-09-26]] ## Highlights - There exists a "good" Nash equilibrium in which Alice bids *a* and Bob bids *b*; Alice receives the item and pays *b*. The social welfare is *a*, which is optimal. However, there also exists a "bad" Nash equilibrium in which Alice bids 0 and Bob bids e.g. *a*+1; Bob receives the item and pays nothing. This is an equilibrium since Alice does not want to overbid Bob. The social welfare is *b*. Hence, the PoA is *a*/*b*, which is unbounded.