Question 2 Consider a standard auction setting with two bidders (i = 1,2). Let F₁(v) = √ where v € [0, 1] the cumulative distribution which bidder 1's valuation is drawn from (and f₁ = the corresponding density function). Let F₂(v) = 1v² where v € [0,2] the cumulative distribution which bidder 2's valuation is drawn from (and f2 corresponding density function). the - Consider Second price sealed auction. (a) Is bidding one's own valuation a weakly dominant strategy for bidder 1? Explain why/why not. (b) Is bidding one's own valuation a weakly dominant strategy for bidder 2? Explain why/why not. (c) What is the expected payment of bidder 1? (d) What is the expected payment of bidder 2?
Question 2 Consider a standard auction setting with two bidders (i = 1,2). Let F₁(v) = √ where v € [0, 1] the cumulative distribution which bidder 1's valuation is drawn from (and f₁ = the corresponding density function). Let F₂(v) = 1v² where v € [0,2] the cumulative distribution which bidder 2's valuation is drawn from (and f2 corresponding density function). the - Consider Second price sealed auction. (a) Is bidding one's own valuation a weakly dominant strategy for bidder 1? Explain why/why not. (b) Is bidding one's own valuation a weakly dominant strategy for bidder 2? Explain why/why not. (c) What is the expected payment of bidder 1? (d) What is the expected payment of bidder 2?
A First Course in Probability (10th Edition)
10th Edition
ISBN:9780134753119
Author:Sheldon Ross
Publisher:Sheldon Ross
Chapter1: Combinatorial Analysis
Section: Chapter Questions
Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...
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Question 2 Consider a standard auction setting with two bidders (i = 1,2). Let F₁(v) :
√ where v € [0, 1] the cumulative distribution which bidder 1's valuation is drawn from
(and f₁ = v¯ the corresponding density function). Let F2(v) v² where v € [0, 2]
the cumulative distribution which bidder 2's valuation is drawn from (and ƒ2 = ¹⁄v the
corresponding density function).
=
Consider Second price sealed auction.
(a) Is bidding one's own valuation a weakly dominant strategy for bidder 1? Explain
why/why not.
(b) Is bidding one's own valuation a weakly dominant strategy for bidder 2? Explain
why/why not.
(c) What is the expected payment of bidder 1?
(d) What is the expected payment of bidder 2?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb6850198-ddf3-4095-a986-91436c3e23e9%2F3547d8e7-31fb-4a2c-8985-ca1ce885e020%2Fadjsogg_processed.png&w=3840&q=75)
Transcribed Image Text:=
Question 2 Consider a standard auction setting with two bidders (i = 1,2). Let F₁(v) :
√ where v € [0, 1] the cumulative distribution which bidder 1's valuation is drawn from
(and f₁ = v¯ the corresponding density function). Let F2(v) v² where v € [0, 2]
the cumulative distribution which bidder 2's valuation is drawn from (and ƒ2 = ¹⁄v the
corresponding density function).
=
Consider Second price sealed auction.
(a) Is bidding one's own valuation a weakly dominant strategy for bidder 1? Explain
why/why not.
(b) Is bidding one's own valuation a weakly dominant strategy for bidder 2? Explain
why/why not.
(c) What is the expected payment of bidder 1?
(d) What is the expected payment of bidder 2?
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