What is the empirical distribution of generated bid values based on sampling?

• A. The generated values will have an empirical distribution similar to the sample on which they are based.
• B. The generated values are uniformly distributed.
• C. They follow an exponential distribution.
• D. They are drawn from a fixed set of values.

Answer: (A)

When you generate bids by sampling from historical bids, you’re using the empirical distribution of those bids as the generator. The empirical distribution assigns probability to each observed value in proportion to how often it appeared in the sample. Therefore, drawing repeatedly from that sample reproduces the same shape and relative frequencies as the data you started with, within the usual sampling variability.

If the data didn’t actually follow a uniform, exponential, or some fixed set pattern, those forms wouldn’t naturally arise from sampling the observed bids. They only would if the data themselves had that specific structure.