Scenario: Four friends-Tom, Bill, Jeff, and Roger-are participating in an English auction. Tom values the good being auctioned at $500, Bill values it at $210, Jeff values it at $350, and Roger values it at $625.
-Refer to the scenario above.Which of the following is true in this case?
A) There is no Nash equilibrium.
B) There is no dominant strategy equilibrium.
C) The dominant strategy equilibrium is the Nash equilibrium.
D) The dominant strategy equilibrium is not the Nash equilibrium.

Question

Quizplus · Accepted Answer

In an English auction, each bidder has a dominant strategy to bid slightly above the second-highest valuation as long as it is below their own valuation. Since each bidder's dominant strategy leads directly to the Nash equilibrium, where the highest valuer wins the item at a price just above the second-highest valuation, the dominant strategy equilibrium is indeed the Nash equilibrium in this scenario.

Scenario: Four Friends-Tom, Bill, Jeff, and Roger-Are Participating in an English