Multiple Choice
Suppose that Hans and Frans are bidding for an 1878CC Morgan silver dollar. Hans knows that Frans is willing to pay $1,150. Frans knows that Hans is willing to pay $975. Suppose that the seller's reservation price is $800 and bids are in $100 increments. Frans' dominant strategy in a sealed-bid, second-price auction is to submit a bid of:
A) $800.
B) $900.
C) $1,000.
D) $1,100.
E) None of the above.
Correct Answer:
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