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:

Deerskins

The hides of deer, which have been used historically and in contemporary times for clothing, accessories, and other products due to their durability and texture.

Slaves

Individuals forced into servitude against their will, often without compensation, considered property under the laws of their societies.

Fleeing Slavery

The act of escaping from the condition of being legally owned by someone else and forced to work for them, often observed in historical contexts such as the antebellum United States.