Infrastructure Contract: Mumbai Metro Line
The Mumbai Metropolitan Region Development Authority is auctioning the construction contract for Metro Line 12 (30 km elevated corridor). Estimated project value: ₹8,500 crores. Your firm competes against 4 other major infrastructure companies.
🏗️ Your Construction Firm
Valuation: ₹7,800 crores
Cost Structure: Fixed ₹2,000 cr + Variable 65% of contract
Profit Margin Target: 12-15%
🏭 Competitor Analysis
Market Intelligence: 4 firms bidding (L&T, GMR, Adani, Reliance Infrastructure)
Estimated Valuations: ₹7,200 - ₹8,200 crores
Historical Bid Patterns: Typically bid 85-95% of valuation
💰 Submit Your Bid
Enter your strategic bid to see auction results and analyze optimal bidding strategies...
📊 Auction Analytics
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Auctions Played
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Revenue Efficiency
🎯 Mechanism Design Analysis
Vickrey-Clarke-Groves
Second-price auctions incentivize truthful bidding as dominant strategy, maximizing allocative efficiency.
Revenue Equivalence Theorem
Under risk neutrality and symmetric valuations, all auction formats yield identical expected revenue.
Winner's Curse
In common-value auctions, winning bidders often overestimate project profitability, leading to systematic losses.
Optimal Reserve Prices
Sellers maximize revenue by setting reserve prices above marginal cost, excluding low-valuation bidders.