>> Business Economics
Consider an antique auction where bidders have independent private values. There are two bidders, each of whom perceives that valuations are uniformly distributed between $100 and $1,000. One of the bidders is Sue, who knows her own valuation is $200. What is Sue's optimal bidding strategy in a Dutch auction?
Submit a bid of $150.
Submit a bid of $200.
Submit a bid that is less than $150.
Yell "mine" when the bid reaches $150.