iformation. Player l's value for the object, denoted by vi is drawn From a continuous distribution with (1.2] as its support. Player 2's value for the object, denoted by v2, is likewise drawn from the interval 0, 1]. 1. What is the equilibrium in dominant strategies if a second price auction is used to allocate the object. Is the outcome ex-post efficient? 2. For what pairs (v1, v2) should Player 1 and Player 2 respectively be allocated the object in a mechanism that maximizes expected revenue for the seller? 3. Comment on the differing allocations you obtained in the previous two parts.
iformation. Player l's value for the object, denoted by vi is drawn From a continuous distribution with (1.2] as its support. Player 2's value for the object, denoted by v2, is likewise drawn from the interval 0, 1]. 1. What is the equilibrium in dominant strategies if a second price auction is used to allocate the object. Is the outcome ex-post efficient? 2. For what pairs (v1, v2) should Player 1 and Player 2 respectively be allocated the object in a mechanism that maximizes expected revenue for the seller? 3. Comment on the differing allocations you obtained in the previous two parts.
Chapter8: Game Theory
Section: Chapter Questions
Problem 8.9P
Related questions
Question
![Question 4 Consider allocating an object to one of two players when each player's pref-
erences are her private information. Player 1's value for the object, denoted by vị is drawn
from a continuous distribution with (1. 2] as its support. Player 2's value for the object,
denoted by v2, is likewise drawn from the interval 0, 1].
1. What is the equilibrium in dominant strategies if a second price auction is used to
allocate the object. Is the outcome ex-post efficient?
2. For what pairs (v1, v2) should Player 1 and Player 2 respectively be allocated the object
in a mechanism that maximizes expected revenue for the seller?
3. Comment on the differing allocations you obtained in the previous two parts.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffa57eebd-2114-41be-a971-ce72250f8d60%2Fdc598707-11a3-4a78-aa7b-37901457bd53%2F4x4y5yj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Question 4 Consider allocating an object to one of two players when each player's pref-
erences are her private information. Player 1's value for the object, denoted by vị is drawn
from a continuous distribution with (1. 2] as its support. Player 2's value for the object,
denoted by v2, is likewise drawn from the interval 0, 1].
1. What is the equilibrium in dominant strategies if a second price auction is used to
allocate the object. Is the outcome ex-post efficient?
2. For what pairs (v1, v2) should Player 1 and Player 2 respectively be allocated the object
in a mechanism that maximizes expected revenue for the seller?
3. Comment on the differing allocations you obtained in the previous two parts.
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