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You are one of five risk-neutral bidders participating in an independent private values auction. Each bidder perceives that all other bidders' valuations for the item are evenly distributed between $30,000 and $60,000. For each of the following auction types, determine your optimal bidding strategy if you value the item at $47,000 . a. First-price, sealed-bid auction Bid $60,000 Bid $43,600 Bid $30,000 Bid $47,000. b. Dutch auction Let the auctioneer continue to lower the price until it reaches $47,000, and then yell "Mine!". Let the auctioneer continue to lower the price until it reaches $60,000, and then yell "Mine!". Let the auctioneer continue to lower the price until it reaches $30,000, and then yell "Mine!". Let the auctioneer continue to lower the price until it reaches $43,600, and then yell "Mine!". c. Second-price, sealed-bid auction. Bid $30,000 Bid $60,000 Bid $43,600 Bid $47,000

You are one of five risk-neutral bidders participating in an independent private values auction. Each bidder perceives that all other bidders' valuations for the item are evenly distributed between $30,000 and $60,000. For each of the following auction types, determine your optimal bidding strategy if you value the item at $47,000 . a. First-price, sealed-bid auction Bid $60,000 Bid $43,600 Bid $30,000 Bid $47,000. b. Dutch auction Let the auctioneer continue to lower the price until it reaches $47,000, and then yell "Mine!". Let the auctioneer continue to lower the price until it reaches $60,000, and then yell "Mine!". Let the auctioneer continue to lower the price until it reaches $30,000, and then yell "Mine!". Let the auctioneer continue to lower the price until it reaches $43,600, and then yell "Mine!". c. Second-price, sealed-bid auction. Bid $30,000 Bid $60,000 Bid $43,600 Bid $47,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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You are one of five risk-neutral bidders participating in an independent private values auction. Each bidder perceives that all other bidders' valuations for the item are evenly distributed between $30,000 and $60,000. For each of the following auction types, determine your optimal bidding strategy if you value the item at $47,000 .a. First-price, sealed-bid auction Bid $60,000 Bid $43,600 Bid $30,000 Bid $47,000. b. Dutch auction Let the auctioneer continue to lower the price until it reaches $47,000, and then yell "Mine!". Let the auctioneer continue to lower the price until it reaches $60,000, and then yell "Mine!". Let the auctioneer continue to lower the price until it reaches $30,000, and then yell "Mine!". Let the auctioneer continue to lower the price until it reaches $43,600, and then yell "Mine!". c. Second-price, sealed-bid auction. Bid $30,000 Bid $60,000 Bid $43,600 Bid $47,000 d. English auction. Remain active until the price exceeds $60,000, and then drop out . Remain active until the price exceeds $30,000, and then drop out. Remain active until the price exceeds $47,000, and then drop out. Remain active until the price exceeds $43,600, and then drop out.
Transcribed Image Text:You are one of five risk-neutral bidders participating in an independent private values auction. Each bidder perceives that all other bidders' valuations for the item are evenly distributed between $30,000 and $60,000. For each of the following auction types, determine your optimal bidding strategy if you value the item at $47,000 .a. First-price, sealed-bid auction Bid $60,000 Bid $43,600 Bid $30,000 Bid $47,000. b. Dutch auction Let the auctioneer continue to lower the price until it reaches $47,000, and then yell "Mine!". Let the auctioneer continue to lower the price until it reaches $60,000, and then yell "Mine!". Let the auctioneer continue to lower the price until it reaches $30,000, and then yell "Mine!". Let the auctioneer continue to lower the price until it reaches $43,600, and then yell "Mine!". c. Second-price, sealed-bid auction. Bid $30,000 Bid $60,000 Bid $43,600 Bid $47,000 d. English auction. Remain active until the price exceeds $60,000, and then drop out . Remain active until the price exceeds $30,000, and then drop out. Remain active until the price exceeds $47,000, and then drop out. Remain active until the price exceeds $43,600, and then drop out.
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