There are four bidders. Their valuations are commonly known to be in between 200 and 600, equally likely. Every bidder knows his/her valuation but does not know the valuations of the others. The actual valuations are: V₁ - 400 V2-480 V3-520 V4-560 The seller in the equilibrium of a first price auction obtains an expected payoff of: 450 b-470 0.500 d. 480 e. None of the above
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![QUESTION 9
There are four bidders. Their valuations are commonly known to be in between 200 and 600, equally likely. Every bidder knows his/her
valuation but does not know the valuations of the others. The actual valuations are:
V₁ = 400 V2 = 480
V3 = 520
V4-560
The seller in the equilibrium of a first price auction obtains an expected payoff of:
a. 450
b.470
C-500
d.480
0.
None of the above](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0091e3ab-f53a-4221-839c-56dd33a10da0%2F14c6bd31-fd01-4dfe-b630-7257c7661f69%2F0jj38sb_processed.png&w=3840&q=75)
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- A cool kid is willing to rename himself for a profit. He decides to auctionoff the naming right. Two bidders show interest. Their valuations for thenaming right are independently and uniformly distributed over [0,100].There are several possible ideas to design the auction.(a) The auction runs as follows. Both bidders are invited to the sameroom; an auctioneer will start the auction with an initial price 0, and increase it by $1 every minute. The bidders are not allowed to say anything during the process, but they can walk out of the room at any moment. If one bidder walks out of the room when the price increases to p (the bidder does not need to pay), the remaining bidder will be awarded the naming right for a price of p. If both walk out when the price reaches p, the naming right is not assigned and the two bidders do not need to pay. What should the bidders do? Explain your answer. (b) Both bidders are invited to submit their bids covertly (bids are non-negative real…4. A uniform price auction is an auction where all the winners pay the same price. A k-th price auction is an auction where the price paid by the winner(s) is the k-th highest bid. We run a 3rd price, uniform price auction for two items, so the winners are the two bidders with the highest bid. There are 4 bidders, A, B, C and D, and they bid respectively $10, $9, $8 and $12. (A) Bidders A and B win the auction and pay $9. (B) Bidders A and D win the auction and pay $9. (C) Bidders B and D win the auction and pay $10. (D) Bidders B and C win the auction and pay $8.A cool kid is willing to rename himself for a profit. He decides to auctionoff the naming right. Two bidders show interest. Their valuations for thenaming right are independently and uniformly distributed over [0;100]:There are several possible ideas to design the auction. The auction runs as follows. Both bidders are invited to the sameroom; an auctioneer will start the auction with an initial price 0 and increase it by $1 every minute. The bidders are not allowed to say anything during the process, but they can walk out of the room at any moment. If one bidder walks out of the room when the price increases to p(the bidder does not need to pay), the remaining bidder will be awarded the naming right for a price of p. If both walk out when the price reaches p, the naming right is not assigned and the two bidders do not need to pay. What should the bidders do? Explain your answer.
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