Antique auction where bidders have independent private value

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Reference no: EM13837079

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.

Reference no: EM13837079

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