You are one of five risk-neutral bidders participating in an independent private values auction. Each bidder perceives that all other bidders’ valuations for the item are evenly distributed between $60,000 and $100,000. For each of the following auction types, determine your optimal bidding strategy if you value the item at $82,000.
a. First-price, sealed-bid auction. Bid $82,000. Bid $60,000. Bid $77,600. Bid $100,000.
b. Dutch auction. Let the auctioneer continue to lower the price until it reaches $100,000, and then yell "Mine!". Let the auctioneer continue to lower the price until it reaches $60,000, and then yell "Mine!". Let the auctioneer continue to lower the price until it reaches $82,000, and then yell "Mine!". Let the auctioneer continue to lower the price until it reaches $77,600, and then yell "Mine!".
c. Second-price, sealed-bid auction. Bid $77,600. Bid $82,000. Bid $60,000. Bid $100,000.
d. English auction. Remain active until the price exceeds $100,000, and then drop out. Remain active until the price exceeds $60,000, and then drop out. Remain active until the price exceeds $82,000, and then drop out. Remain active until the price exceeds $77,600, and then drop out.