In a First-Price Sealed-Bid Auction When Bidders Have Private Values

Multiple Choice

In a first-price sealed-bid auction when bidders have private values, the best bidding strategy is to bid:

A) your value for the object since this gives you the highest probability of winning the auction.
B) the value of the second highest bidder since this gives you the highest probability of winning while maximizing your surplus.
C) something less than your maximum willingness to pay, although how much less depends on a variety of factors.
D) continuing bidding until you win if you like the object.