An antique cabinet is being sold by means of an English auction.There are four bidders, Gloria, Elise, Judy, and Arabella.These bidders are unacquainted with each other and do not collude.Gloria values the cabinet at $800, Elise values it at $500, Judy values it at $1,800, and Arabella values it at $600.If the bidders bid in their rational self-interest, the cabinet will be sold to

Question

Quizplus · Accepted Answer

In an English auction, the item is sold to the highest bidder for their bid amount. Judy values the cabinet the most at $1,800. However, she only needs to outbid the second-highest bidder (Gloria, who values it at $800) to win. Therefore, Judy will win the auction by bidding slightly more than $800, not needing to bid her maximum valuation of $1,800.

An Antique Cabinet Is Being Sold by Means of an English