AppliedMultiple choice
In a sealed-bid auction where the winner pays the second-highest bid, what should you bid?
- AYour true value, whatever anyone else does
- BSlightly below your true value, to protect your margin
- CWhatever you think the second-highest bid will be
- DAbove your value, since you will pay less than you bid
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Game theory: dominance, mixing and the indifference condition
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