Amazon HQ2 and a unique matching market
https://www.cnbc.com/2018/08/16/as-amazon-narrows-choice-for-hq2these-cities-finishing-strong.html
In this article, they discuss the bidding war for Amazon’s newest headquarters. This bidding war resembles a matching market where market clearing prices are adjusted based on desirability and others bids. Amazon has defined their own definition of desirability: the location must be a metropolitan area with over 1 million people, a stable and business-friendly environment, ability to attach strong technical talent, and communities with good real estate options.
Amazon’s new HQ would bring in over 50,000 new jobs to the area. This is a huge economic boost to whichever city Amazon decides to locate in. Different cities have placed different values on what they are willing to pay to have amazon come to their city. In this way, this is a 250 seller to 1 buyer market which means the constricted set is very large. Because there is only one buyer, this market acts more like a first price auction where the winner will pay their value and win the Amazon coming to their city.
In this way, it is optimal for bidders to bid slightly below their values otherwise, the payout would be 0. However, unlike normal auction cases, the payout may not actually be 0 over a long period of time as having a big business like Amazon take roots in their city would boost the economy of the city over time continually paying out over time. In this way, I would argue that strategies should change and bidders should bid their true value in order to maximize their chance of winning the bid.