Market Making Auction Game Interview
Market making auction game interview guide for combining value estimates, quoted markets, winner selection, and adverse-selection intuition.
Candidates facing auction-like trading games.
Auction games mix value and selection
An auction-like trading game asks not only what something is worth, but what winning or trading reveals about that value.
Estimate value first
Start with your expected value or reservation price. Then account for the rules that determine whether you win or trade.
Concrete example
If winning means you were the highest bidder among informed estimates, the value conditional on winning may be worse than your original estimate.
Adverse selection link
Winning an auction or getting filled can be bad news if it happens mostly when your price is too aggressive.
Quote conservatively when selected
A spread, margin of safety, or smaller size can help protect against selection risk in toy interview reasoning.
Common mistakes
Candidates often maximize chance of winning without asking whether winning is profitable after selection effects.
Practice the pattern
Use the LeetQuidity curriculum and calibration to turn this topic into a focused practice plan.