Consider 45 Risk-Neutral Bidders Who Are Participating in a Second-Price,sealed-Bid

question 8

Multiple Choice

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 their own valuation of the item.
• B) shade their bid to just below their own valuation.
• C) bid according to the following bid function: b = v − (v − L)/n.
• D) bid one penny above their own valuation to ensure they get the item.

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Definitions:

Sense

A physiological capacity of organisms that provides data for perception, such as sight, sound, touch, taste, and smell.

Conditional Acceptance

An agreement or acceptance that is subject to specific conditions or requirements being met.

Genuineness

The quality of being authentic and sincere in one’s feelings, thoughts, and actions.

Empathic Understanding

The capacity to accurately comprehend and share another person’s emotional state or context, while recognizing its distinctiveness from one's own feelings.