x)=2x IT X Is betwe 0 T; T(X)=C wn valuation, while the seller does r e seller sets a price, and then each b f more than a single buyer wants to chosen). Find a price that maximizes

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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There is a single object for sale and 2 buyers whose valuations are iid, with pdf
given by: f(x)=2x if x is between 0 and 1; f(x)=0 otherwise. Each buyer knows
his or her own valuation, while the seller does not know the valuations of the
buyers. The seller sets a price, and then each buyer decides to buy or not for
this price (if more than a single buyer wants to buy then one of them is
randomly chosen). Find a price that maximizes the expected revenue of the
seller.
Transcribed Image Text:There is a single object for sale and 2 buyers whose valuations are iid, with pdf given by: f(x)=2x if x is between 0 and 1; f(x)=0 otherwise. Each buyer knows his or her own valuation, while the seller does not know the valuations of the buyers. The seller sets a price, and then each buyer decides to buy or not for this price (if more than a single buyer wants to buy then one of them is randomly chosen). Find a price that maximizes the expected revenue of the seller.
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