You are about to attend an auction for items used in the first Start Wars epic f
ID: 1119591 • Letter: Y
Question
You are about to attend an auction for items used in the first Start Wars epic film, A New Hope. Alec Guinness’ Obi Wan Kenobi costume will be auctioned. There are expected to be 100 eager bidders in the audience. If the auction is an English auction you should bid?
A. The value of the item to you
B. A value less than the value of the item to you
C. The value you estimate after an extensive analysis of Star Wars memorabilia
D. A very large sum, e.g. 10 million US dollars, to ensure you get the item
If the Obi Wan Kenobi costume has a value of $5000 to you. You know that the lowest value will be $1000. At the same auction, now a first price sealed bid auction, what should you bid?
A. A very large sum, e.g. 10 million US dollars, to ensure you get the item
B. Somewhat less than $5000, let’s say $3950
C. $0, hoping that only one other person will bid a positive amount
D. Exactly $4960, to economically maximize your chance of winning
Explanation / Answer
c). The value you estimate after extensive analysis of Star Wars Memorabilia. This is because English Auction usually starts from a bid which least value that the firm puts on its assets
d). Exactly 4960 to economically maximize your chance of winning
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