Please what is the expected price paid? and with collusion, the expected price paid? You hold an oral, or English, auction among three bidders. You estimate that each bidder has a value of either $24 or $30 for the item, and you attachprobabilities to each value of 50%. The winning bidder must pay a price equal to the second highest bid.The following table lists the eight possible combinations for bidder values. Each combination is equally likely to occur.On the following table, indicate the price paid by the winning bidder.Bidder 1 ValueBidder 2 ValueBidder 3 Value($)($)($)ProbabilityPrice$24$24$240.125$24$24$24$300.125$24$24$30$240.125$24$24$30$300.125$30$30$24$240.125$24$30$24$300.125$30$30$30$240.125$30$30$30$300.125$30The expected price paid is $Suppose that bidders 1 and 2 collude and would be willing to bid up to a maximum of their values, but the two bidders would not be willing to bidagainst each other. The probabilities of the combinations of bidders are still all equal to 0.125. Continue to assume that the winning bidder must pay aprice equal to the second highest bid. Suppose that bidders 1 and 2 collude and would be willing to bid up to a maximum of their values, but the two bidders would not be willing to bidagainst each other. The probabilities of the combinations of bidders are still all equal to 0.125. Continue to assume that the winning bidder must pay aprice equal to the second highest bid.On the following table, indicate the price paid by the winning bidder.Maximum of Bidder 1 and 2Bidder 3 Value($)($)ProbabilityPrice$24$240.125$24$24$300.125$24$30$240.125$24$30$300.125$30$30$240.125$24$30$300.125$30$30$240.125$24$30$300.125$30With collusion, the expected price paid is $

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Description: Please what is the expected price paid? and with collusion, the expected price paid? You hold an oral, or English, auction among three bidders. You estimate that each bidder has a value of either $24 or $30 for the item, and you attachprobabilities t

(a). Compute the expected price paid: The expected price paid is obtained as $27 from the…

Math

Probability

You hold an oral, or English, auction among three bidders. You estimate that each bidder has a value of either $24 or $30 for the item, and you attach probabilities to each value of 50%. The winning bidder must pay a price equal to the second highest bid. The following table lists the eight possible combinations for bidder values. Each combination is equally likely to occur.

You hold an oral, or English, auction among three bidders. You estimate that each bidder has a value of either $24 or $30 for the item, and you attach probabilities to each value of 50%. The winning bidder must pay a price equal to the second highest bid. The following table lists the eight possible combinations for bidder values. Each combination is equally likely to occur.

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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