What is the dominant strategy for bidders in an English oral auction?
A) Keep bidding until all other bidders quit, regardless of your reservation price.
B) Bid until the previous bid price equals the reservation price of the last bidder.
C) Bid until the first-price and second-price bids are equal.
D) Stop bidding once the price exceeds your reservation price.

Question

Quizplus · Accepted Answer

The dominant strategy for bidders in an English oral auction is to stop bidding once the price exceeds their reservation price. This ensures that they do not pay more than what they are willing to pay, while also allowing the other bidders to continue bidding and driving up the price. Choosing option A may result in paying more than the bidder's reservation price, while options B and C may not be feasible in a fast-paced auction where the bid increments are small.

What Is the Dominant Strategy for Bidders in an English