What is optimal strategy, if Bob bids $ 5, Alice bids $ 6

What is optimal strategy

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Q. Alice and Bob are at a strange auction. Item up for auction is $ 20. rules are that no one can bid twice in a row and that highest bidder gets $ 20. Also and this is very strange, highest bidder and next highest bidder have to pay their bids. For example, if Bob bids $ 5, Alice bids $ 6 and Bob n passes, Alice gets $ 20 and pays $ 6 to auctioneer and Bob pays auctioneer $ 5. Both have $ 100 to bid. What is optimal strategy?

Reference no: EM1369069

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