Consider 4 bidders whose values are independently and uniformly distributed over [0, 10]. (a) What are...

Consider 4 bidders whose values are independently and uniformly distributed over [0, 10].

(a) What are the expected selling prices in a (i) second-price auction, and (ii) first-price auction.

(b) Suppose the values of the bidders are 8, 7, 4, and 2. What would be the selling price in a (i) second-price auction, and (ii) first-price auction.

(c) Suppose the values of the bidders are 9, 5, 4, and 2. What would be the selling price in a (i) second-price auction, and (ii) first-price auction.

(d) Comment on (a), (b), (c).

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Expert Solution

Rahul Sunny answered 10 months ago

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