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 best response of one bidder is to place a bid of $9,000, what is her maximum willingness to pay for the necklace?

Question

Quizplus · Accepted Answer

In a Dutch auction, the auctioneer starts with a high asking price which is gradually lowered until some participant is willing to accept the auctioneer's price, or a predetermined minimum price is reached. If a bidder's best response is to place a bid of $9,000, it means this is the highest price at which they are willing to buy the necklace before someone else does, indicating their maximum willingness to pay is slightly above $9,000, hence $10,000.

Rebecca Is Participating in a Dutch Auction for an Antique