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 $20,000 and $60,000. For each of the following auction types, determine your optimal bidding strategy if you value the item at $48,000. a. First-price, sealed-bid auction. Bid $20,000. Bid $42,400. Bid $60,000. Bid $48,000. b. Dutch auction. 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 $48,000, and then yell "Mine!". Let the auctioneer continue to lower the price until it reaches $20,000, and then yell "Mine!". Let the auctioneer continue to lower the price until it reaches $42,400, and then yell "Mine!". c. Second-price, sealed-bid auction. Bid $48,000. Bid $20,000. Bid $60,000. Bid $42,400. d. English auction. Remain active until the price exceeds $42,400, and then drop out. Remain active until the price exceeds $60,000, and then drop out. Remain active until the price exceeds $48,000, and then drop out. Remain active until the price exceeds $20,000, and then drop out.
