In a standard highest sealed-bid auction, a bidder's best strategy:
A) is to bid what he or she would be willing to pay.
B) is to bid slightly more than what he or she expects the second highest bidder to bid.
C) always ensures that the person who wants it the most will get the bid.
D) requires the bidder to understand game theory to bid properly.

Question

Quizplus · Accepted Answer

In a standard highest sealed-bid auction, the bidder's best strategy is to bid slightly more than what they expect the second highest bidder to bid. This is because if they bid too low, they may not win the auction, and if they bid too high, they may overpay for the item.

In a Standard Highest Sealed-Bid Auction, a Bidder's Best Strategy