Scenario: Rebecca is participating in a Dutch auction for an antique necklace. The total number of bidders in this auction is ten. Rebecca values the necklace at $45,000, while all the other bidders value it below $45,000.
-Refer to the scenario above.If the number of participants in the auction increases to twenty,Rebecca should place a bid of ________.

Question

Quizplus · Accepted Answer

In a Dutch auction, the price decreases until one bidder accepts the price. As there are more bidders, it is likely that the final price will be lower than in a smaller auction. Therefore, Rebecca should adjust her bid lower to increase her chances of winning. A bid of $42,750 is a reasonable compromise between her valuation of the necklace and the likely lower final price in a larger auction.

Scenario: Rebecca Is Participating in a Dutch Auction for an Antique