1. You are the bidder in an independent private values auction. Each bidder perceives that
valuations are evenly distributed between $0 and $1,000. Your own valuation of the item is
$900. Determine your optimal bidding strategy in a first-price, sealed-bid auction with:
a. Two bidders.
b. Three bidders.
c. 20 bidders.
d. a very large number of bidders (assume $n$ goes to the infinity)
2. Your firm is planning to hold an auction to sell its mining facility. Your boss has asked you to
determine the best type of auction to hold to maximize expected profits from selling the facility.
Based on your knowledge of auctions, provide your boss with a suggestion. Please give an
explanation for your suggestion.
3. You are a bidder in an independent private values auction. Each bidder perceives that
valuations are evenly distributed between $100 and $1,000. If there is a total of three bidders and
your own valuation of the item is $900, describe your strategy (how you would behave) and your
optimal bidding in:
a. A first-price, sealed-bid auction.
b. A Dutch auction.
c. A second-price, sealed-bid auction.
d. An English auction.
Explain and/or show your work.