Consider 45 risk-neutral bidders who are participating in a second-price, sealed-bid auction. It is commonly known that bidders have independent private values. Based on this information, we know the optimal bidding strategy for each bidder is to:
A. bid one penny above their own valuation to ensure they get the item.
B. bid according to the following bid function: b = v ? (v ? L)/n.
C. shade their bid to just below their own valuation.
D. bid their own valuation of the item.
Answer: D
You might also like to view...
In the figure above, suppose the market is at equilibrium. Then area B is the
A) marginal benefit. B) marginal cost. C) amount of the consumer surplus. D) amount of the producer surplus. E) deadweight loss.
A bond with default risk will always have a ________ risk premium and an increase in its default risk will ________ the risk premium
A) positive; raise B) positive; lower C) negative; raise D) negative; lower
During what period did the US expand its area by the greatest amount?
a. Since 1970. b. 1910-1950. c. 1880-1900. d. 1800-1850. e. 1781-1795.
A black market
A. was created when after hours trading was permitted on some stock exchanges. B. is a market where products with outdated expiration dates are sold. C. can arise when government imposes a price floor below the market clearing price. D. can arise when government imposes a price ceiling below the market clearing price.