Question: Your company is bidding for a broadband spectrum license. You have been asked to submit an optimal bidding strategy. You expect that bidders will have independent private values for the licenses because each bidder presently has a different structure in place. You believe the valuations for these licenses will be between $200 million and $700 million. Your own valuation is $650 million. There is some uncertainty about the auction design that will be used, so you must suggest an optimal bidding strategy for the following auction designs:
1. Second-price, sealed-bid auction.
2. English auction.
3. Dutch auction.