Scenario: An ancient painting is being auctioned off in an English auction. The following table shows the maximum willingness to pay of each bidder.

-Refer to the scenario above.The optimal strategy for Rachel is to bid a price ________.

Question

Scenario: An ancient painting is being auctioned off in an English auction. The following table shows the maximum willingness to pay of each bidder.
 
-Refer to the scenario above.The optimal strategy for Rachel is to bid a price ________.

Quizplus · Accepted Answer

The optimal strategy for Rachel is to bid up to her maximum willingness to pay, as this ensures that she has the highest chance of winning the auction while not overpaying. Bidding above her willingness to pay or equal to half the amount she is willing to pay or equal to 5/6 times her willingness to pay could result in her overpaying for the painting.

Scenario: an Ancient Painting Is Being Auctioned Off in an English