Consider a second-price sealed-bid auction of a single object with two bidders. Both bidders have the same value v for the object. Bidder 1 knows the exact value of v while bidder 2 knows only that v is uniformly distributed on [0, 1]. (a) Identify all weakly dominated strategies for each player. Note that a strategy for bidder 1 consists of a bid b(v) for each v € [0, 1], while a strategy for bidder 2 consists only of a single bid b. We say that a strategy is weakly dominated for bidder 1 if there is some v € [0, 1] for which the bid b(v) is weakly dominated.
Consider a second-price sealed-bid auction of a single object with two bidders. Both bidders have the same value v for the object. Bidder 1 knows the exact value of v while bidder 2 knows only that v is uniformly distributed on [0, 1]. (a) Identify all weakly dominated strategies for each player. Note that a strategy for bidder 1 consists of a bid b(v) for each v € [0, 1], while a strategy for bidder 2 consists only of a single bid b. We say that a strategy is weakly dominated for bidder 1 if there is some v € [0, 1] for which the bid b(v) is weakly dominated.
Chapter8: Game Theory
Section: Chapter Questions
Problem 8.7P
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