In a first-price sealed-bid auction bidders submit sealed bids, and the bidder making the highest bid claims the item and pays the amount she has bid. Why is overbidding a dominated strategy in this type of auction? Because in case of winning, it necessarily leads to a loss. Because it does not increase the probability of winning. Because bidding one's true value is the dominant strategy. O None of the above.

In a first-price sealed-bid auction bidders submit sealed bids, and the bidder making the highest bid claims the item and pays the amount she has bid. Why is overbidding a dominated strategy in this type of auction? Because in case of winning, it necessarily leads to a loss. Because it does not increase the probability of winning. Because bidding one's true value is the dominant strategy. O None of the above.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter15A: Auction Design And Information Economics

Section: Chapter Questions

Problem 8E

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