A Manager Bidding in an Auction with Independent Private Values

Multiple Choice

A manager bidding in an auction with independent private values for a large piece of industrial equipment has estimated that the expected profit from the equipment is $10 million. If the manager is indifferent about the uncertainty surrounding the expected profit of the equipment, the manager is_______ and the manager's value of the truck is ________ .

A) risk averse; $10 million
B) risk neutral; less than $10 million
C) risk neutral; $10 million
D) risk averse; less than $10 million