a) Your company is bidding for a service contract in a first-price sealed-bid auction. You value...

a) Your company is bidding for a service contract in a first-price sealed-bid auction. You value the contract at $12 million. You believe the distribution of bids will be uniform, with a high value of $16 million and a low value of $3 million. What is your optimal strategy with 5 bidders?

b) Your company is bidding for a service contract in a first-price sealed-bid auction. You value the contract at $12 million. You believe the distribution of bids will be uniform, with a high value of $16 million and a low value of $3 million. What is your optimal strategy with 10 bidders?

c). Your company is bidding for a service contract in a first-price sealed-bid auction. You value the contract at $12 million. You believe the distribution of bids will be uniform, with a high value of $16 million and a low value of $3 million. What is your optimal strategy with 20 bidders?

d) Your company is bidding for a service contract in a second-priced sealed bid auction. You value the contract at $12 million. You believe the distribution of bids will be uniform, with a high value of $16 million and a low value of $3 million. What is your optimal strategy with 10 bidders?

Solutions

Expert Solution

Rahul Sunny answered 9 months ago

Next > < Previous

Related Solutions

Second Price sealed bid-auction: Assume n players are bidding in an auction in order to obtain...

Second Price sealed bid-auction: Assume n players are bidding in an auction in order to obtain an indivisible object. Denote by vi the value player i attaches to the object; if she obtains the object at the price p her payoff is vi −p. Assume that the players’ valuations of the object are all different and all positive; number the players 1 through n in such a way that v1 > v2 > · · · > vn > 0....

A second-price sealed-bid auction is an auction in which every bidder submits his or her bid...

A second-price sealed-bid auction is an auction in which every bidder submits his or her bid to the auctioneer, the auctioneer announces the winner to be the bidder who submits the highest bid, and the winner pays the highest bid among the losers. Is the following statement True, False, or Uncertain? Explain why. Every player has a weakly dominant strategy in second-price auction.

In auction bidding, the "winner's curse" is the phenomenon of the winning (or highest) bid price...

In auction bidding, the "winner's curse" is the phenomenon of the winning (or highest) bid price being above the expected value of the item being auctioned. A study was conducted to see ifless-experienced bidders were more likely to be impacted by the curse than super-experienced bidders. The study showed that of the 188 bids by super-experienced bidders, 25 winning bids were above the item's expected value, and of the bids by the 140 less-experienced bidders, 31 winning bids were above...

Question 6. There are two bidders in a sealed-bid, second-price auction. The object for sale has...

Question 6. There are two bidders in a sealed-bid, second-price auction. The object for sale has a common value. Each bidder, i = 1,2, receives a signal i that is independently and uniformly distributed on the interval [0, 1]. The true value of the object, v, is the average of the two signals, v = (σ1 + σ2) / 2 (a) If bidder 1 gets the signal σ = 0.7, how much does he think the object is worth? (b)...

N players are bidding on an object in a first price auction. The object has a...

N players are bidding on an object in a first price auction. The object has a value of vi for each player i, where v1 > v2> ... >vn> 0. Each player bids secretly choosing nonnegative real number. The winner is the player who bids the largest number, and that player must pay the amount they bid. If it tie, then the player with the lowest index wins. Formulate this situation as a strategic game( describe the players, actions, and...

Problem 1. An “antique” table is for sale in a sealed bid auction. It will go...

Problem 1. An “antique” table is for sale in a sealed bid auction. It will go to the high bidder at the price the high bidder bids. You don’t know if it is a fake or not, but you do know that 20% of all antiques that look like this one are fakes. You are not able to have an appraiser examine it. If it is a fake, you will know this after you buy it and it will be...

Find a Nash Equilibrium of the second price sealed bid auction that is different from [v1,v2,v3,....,vn]

Consider 45 risk-neutral bidders who are participating in a second-price, sealed-bid auction. It is commonly known...

Consider 45 risk-neutral bidders who are participating in a second-price, sealed-bid auction. It is commonly known that bidders have independent private values. Based on this information, we know the optimal bidding strategy for each bidder is to: A. bid their own valuation of the item. B. shade their bid to just below their own valuation. C. bid according to the following bid function: b = v − (v − L)/n. D. bid one penny above their own valuation to ensure...

Calculating a Bid Price Your company has been approached to bid on a contract to sell...

Calculating a Bid Price Your company has been approached to bid on a contract to sell 15,000 voice recognition (VR) computer keyboards a year for four years. Due to technological improvements, beyond that time they will be outdated and no sales will be possible. The equipment necessary for the production will cost $3.4 million and will be depreciated on a straight-line basis to a zero salvage value. Production will require an investment in net working capital of $75,000 to be...

Consider a sealed-bid auction in which the winning bidder pays the average of the two highest...

Consider a sealed-bid auction in which the winning bidder pays the average of the two highest bids. As in the auction models considered in class, assume that players have valuations v1 > v2 > ... > vn, that ties are won by the tied player with the highest valuation, and that each player’s valuation is common knowledge. Is there any Nash equilibrium in which the two highest bids are different? If there is, give an example. If there is not,...

Subjects