Question

I am holding a sealed-bid, second-price auction for a coupon worth one month of free coffee at Uncommon Grounds. You spend $50 on coffee each month, so your private value of this coupon is exactly $50. However, you learn that the other students in COSC 018 are planning to collude in the auction and bid only 10% of their true values in an attempt to lower the cost of coffee on campus. With this information, what should your bidding strategy be? Provide a justification for your strategy.

Answer 1

The planning of the COSC 018 is good as they are trying to lower the cost of the coffee on the campus by using the unlawful action that cannot be considered as illegal because the person is actually and this is bidding in normal school or college.

the above strategy being used is good as the person is having another person as the second bid so that the price of the coffee decrease in the campus.

Startegy is bid the below the value of the coupon and should not cross the bid above the valuation of the item like here it is $50 the user should not bid above the $50 otherwise it would be a loss to them.