{{ block title }} Understanding Questions {{ endblock }} {{ block content }}

You will now complete 2 questions to ensure you have understood the instructions for the Second Main Task. You must get all of these correct to proceed to the practice rounds.

Question 1:

If you bid $8 and the random number drawn this round is 4, which of the following is true?

  1. You will pay $4 and the citizens' information levels will be reduced for this round.
  2. You will pay $8 and the citizens' information levels will be reduced for this round.
  3. You will pay nothing ($0) and the citizens' information levels will not be reduced for this round.
  4. You will pay nothing ($0) and the citizens' information levels will be reduced for this round.
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Question 2:

Suppose that you value a reduction in the citizens' information levels at $6 for a given round. Which of the following is the optimal bidding strategy?

  1. Bid $10 to maximise the likelihood that the bid is successful.
  2. Bid $6 since this is your true willingness to pay.
  3. Bid $0 to minimise the likelihood that the bid is successful.
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