You are a bidder in an independent private values auction, and you value the object at $4,000. Each bidder perceives that valuations are uniformly distributed between $1,500 and $9,000. Determine your optimal bidding strategy in a first-price, sealed-bid auction when the total number of bidders (including you) is:

a. 2 bidders $2,750

b. 10 bidders $3,750

c. 100 bidders $3,975

Explanation:

Calculation to determine what your optimal bidding strategy in a first-price, sealed-bid auction when the total number of bidders (including you) is:

Using this formula

Optimal bidding = Bidder's own valuation - (Bidder's own valuation - Lowest valuation) ÷ Number of bidders

Let plug in the formula

a) 2 bidders

Optimal bid = $4,000 - [($4,000 - $1,500) ÷ 2]

Optimal bid = $4,000 - ($2,500÷2)

Optimal bid = $4,000 - $1,250

Optimal bid = $2,750

b) 10 bidders

Optimal bid = $4,000 - ($4,000 - $1,500) ÷ 10

Optimal bid = $4,000 - ($2,500÷10)

Optimal bid = $4,000 -$250

Optimal bid =$3,750

c) 100 bidders

Optimal bid = $4,000 - ($4,000 - $1,500) ÷ 100

Optimal bid = $4,000 - ($2,500÷100)

Optimal bid = $4,000-$25

Optimal bid = $3,975

Therefore your optimal bidding strategy in a first-price, sealed-bid auction when the total number of bidders (including you) is:

a. 2 bidders $2,750

b. 10 bidders $3,750

c. 100 bidders $3,975

i might look it up later.

two years ago, when picking flowers in the mountains back of yosemite valley, i found a book. it was blotted and storm-beaten; all of its outer pages were mealy and crumbly. the paper seemed to dissolve like the snow beneath which it had been buried, however; many of the inner pages were well preserved. and although all were more or less stained and torn, whole chapters were easily readable. this is the condition of the great open book of yosemite glaciers today; its granite pages have been torn and blurred by the same storms that wasted the castaway book.

two years ago, when picking flowers in the mountains back of yosemite valley; i found a book. it was blotted and storm-beaten, all of its outer pages were mealy and crumbly. the paper seemed to dissolve like the snow beneath which it had been buried, however, many of the inner pages were well preserved. and although all were more or less stained and torn; whole chapters were easily readable. this is the condition of the great open book of yosemite glaciers today, its granite pages have been torn and blurred by the same storms that wasted the castaway book.