Essay
Consider the following situation: five individuals are participating in an auction for an old bicycle used by a famous cyclist.The table below provides the bidders' valuations of the cycle.The auctioneer starts the bid at an offer price far above the bidders' values and lowers the price in increments until one of the bidders accepts the offer.
a)What is the optimal strategy of each player in this case?
b)Who will win the auction if each bidder places his or her optimal bid?
c)If Claudia wins the auction,how much surplus will she earn?
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a)This is an example of a Dutch auction....View Answer
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