Why can’t someone bid more than they can offer in a second price auctions?

Question

Why can’t an individual place a bid of 10,000$ on a pen, knowing they will only pay the last biggest bid of 10$, and no one can top their offer, because no one will pay that price?

In: 0

Answer 1

Let’s say you bid £10 000 on a pen that is worth £10 to you. Another person comes along and bids £15 because that is what it is worth to them. Now you are stuck paying £15, £5 more than the pen is worth to you.