Suppose that Alpha Inc, Richardson Industries, and K-Tek are the only three firms interested in a plot of land on the outskirts of town. The lot is being auctioned by a second-price sealed bid auction Alpha values the lot at $16,500, Richardson at $18,000, and K-Tek at $12.500 Each bidding firm's consumer surplus is CS--P it wins the auction and 0 af it loses. The values are private. What is each bidder's optimal bid? Who wins the auction, and what price does that firm pay? Alpha's optimal bid is $. Richardson's optimal bid is S and K-Tek's is (Enter your responses as whole numbers)
Suppose that Alpha Inc, Richardson Industries, and K-Tek are the only three firms interested in a plot of land on the outskirts of town. The lot is being auctioned by a second-price sealed bid auction Alpha values the lot at $16,500, Richardson at $18,000, and K-Tek at $12.500 Each bidding firm's consumer surplus is CS--P it wins the auction and 0 af it loses. The values are private. What is each bidder's optimal bid? Who wins the auction, and what price does that firm pay? Alpha's optimal bid is $. Richardson's optimal bid is S and K-Tek's is (Enter your responses as whole numbers)
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter15A: Auction Design And Information Economics
Section: Chapter Questions
Problem 5E
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![Suppose that Alpha Inc, Richardson Industries, and K-Tek are the only three firms interested in a plot of land on the outskirts of town. The lot is being auctioned by a second-price
sealed-bid auction. Alpha values the lot at $16,500, Richardson at $18,000, and K-Tek at $12,500. Each bidding firm's consumer surplus is
CS=-P
if it wins the auction and 0 if it loses. The values are private. What is each bidder's optimal bid? Who wins the auction, and what price does that firm pay?
Alpha's optimal bid is $. Richardson's optimal bid is 5, and K-Tek's is
(Enter your responses as whole numbers)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F987e136f-3819-49fa-a93c-c51a8830eec4%2F551fe053-fb4c-4796-9d05-2b2c9942c43d%2Fzg492rm_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Suppose that Alpha Inc, Richardson Industries, and K-Tek are the only three firms interested in a plot of land on the outskirts of town. The lot is being auctioned by a second-price
sealed-bid auction. Alpha values the lot at $16,500, Richardson at $18,000, and K-Tek at $12,500. Each bidding firm's consumer surplus is
CS=-P
if it wins the auction and 0 if it loses. The values are private. What is each bidder's optimal bid? Who wins the auction, and what price does that firm pay?
Alpha's optimal bid is $. Richardson's optimal bid is 5, and K-Tek's is
(Enter your responses as whole numbers)
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