The Optimal Strategy for a Risk Neutral Bidder in a Second-Price

question 105

Multiple Choice

The optimal strategy for a risk neutral bidder in a second-price, sealed-bid auction with independent private values is to bid

• A)slightly less than his or her valuation.
• B)slightly higher than his or her valuation.
• C)his or her true valuation.
• D)none of the statements associated with this question are correct.

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Definitions:

Joint Tenancy

A form of co-ownership where two or more persons hold an equal interest in a property with the right of survivorship.

Evidenced In Writing

A requirement or practice where the details of an agreement or transaction are documented in written form as proof or validation of its terms.

Statutory Requirements

Legal obligations imposed by a statute that individuals or organizations must follow.

Transfer of Land

The legal process by which ownership of a piece of land is moved from one party to another.