You are playing a game in which a dollar bill is auctioned. The highes

You are playing a game in which a dollar bill is auctioned. The highest bidder receives the dollar in return for the amount bid. However, the second-highest bidder must pay the amount that he or she bids, and gets nothing in return.

The optimal strategy is: A) to bid the smallest allowable increment below $1.
B) to bid nothing.
C) to bid $0.99.
D) to bid more than a dollar.

ANSWER

B