Firm Z Is One of 4 Bidders, Each with a Value

Multiple Choice

Firm Z is one of 4 bidders, each with a value independently drawn from the range $20,000 to $60,000 with all values in between being equally likely. In a sealed-bid auction, Firm Z's equilibrium bidding strategy is:

A) b_i = (.25) (40,000) + .75v_i
B) b_i = (.2) (20,000) + .8v_i
C) b_i = (.5) (40,000) + .5v_i
D) b_i = (.25) (20,000) + .75v_i
E) b_i = (.75) (20,000) + .25v_i