Exercise 24.1 - Question is for a math based Game Theory course There is a simpl
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Question
Exercise 24.1 - Question is for a math based Game Theory course
There is a simple auction with the deadline at noon. You can see the previous offer and you can beat it by at least $1. Which strategy (of A, B, or C) do you choose? Explain why.
(A) bid now, the highest price you can afford and wait till noon to see whether somebody overbids you and pays a ridiculously high price
(B) bid as often as possible until the price becomes too high for you
(C) wait for the last moment and overbid by $1 if the price is not too high
Explanation / Answer
Answer : I will choose the strategy b because in the question it is given that I can beat at least by $1, i.e., $1 is not the situation which is out of my budget. Therefore, I can bid as often as possible till it is in my budget.
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