Question - You are bidding at an art auction. Assume that each bidder has an independent private value for the art being auctioned off. Each bidder perceives that valuations are evenly distributed between $10,000 and $20,000. If there is a total of five risk-neutral bidders and your own valuation of the item is $16,000, what is your optimal bidding strategy in a second-price, sealed-bid auction?

1. Bid less than $16,000
2. Bid more than $16,000
3. Bid exactly $16,000