Consider a seller who wants to sell a single unit of a good and a group...

Consider a seller who wants to sell a single unit of a good and a group of firms interested in buying the good. The seller decides to run a sealed-bid, second-price auction. Your firm intends to bid in the auction and had a private value of c for the good being sold, but is unsure of the number of other firms bidding. There will be either two or three additional firms bidding in the auction, each with an independent private value for the good. What bid should your firm submit in this auction, and how (if at all) should the bid depend on the number of other firms which participate? Provide a justification for your strategy.

Expert Solution

The bid depend on the number of other firms which participate that is the offer (often competitive) to set a price list by a person or business for a product or service or a request to do something. Bidding is used to determine the price or value of something.

Bidding can be done by one person under the influence of a product or service depending on the context of the situation. In the context of an auction, exchange, or real estate, an offer in which a business or individual is willing to pay is called an offer. In the context of a corporate or government procurement initiative, an offer that a business or individual is willing to sell is also called an offer. The term "auction" is also used when betting on poker. Bidding is used by special economies to determine demand and, therefore, the value of a product or asset in the world of modern technology, the Internet is a preferred platform for providing a means of bidding. This is a natural way to set prices in a free market economy.

Many related terms that may or may not use such concepts have evolved in the recent past regarding bids, such as reverse bidding, social bidding, or many other class game concepts that are advertised as Bidding. Bidding is sometimes used as a moral game where the money for the prize is determined not only by luck but also by the general requirements that the prize attracts.

keosha answered 1 year ago

Consider a seller who must sell a single private value good. There are two potential buyers,...

Consider a seller who must sell a single private value good. There are two potential buyers, each with a valuation that is drawn independently and uniformly from the interval [0, 1]. The seller will offer the good using a second-price sealed-bid auction, but he can set a “reserve price” ofr ≥ 0 that modifies the rules of the auction as follows. If both bids are below r then neither bidder obtains the good and it is destroyed. If both bids...

Consider a buyer and seller who enter into a contract where the seller produces a good...

Consider a buyer and seller who enter into a contract where the seller produces a good and delivers it to the buyer for payment. At the time of making the contract, the seller is uncertain as to the actual cost of the project, and the situation is described by the following: Cost = 30 with probability 60% Cost = 70 with probability 20% Cost = 150 with probability 20% Before production occurs, the seller does learn the cost. The value...

15.5. Consider a bundling problem where the principal is the seller of a good with a...

15.5. Consider a bundling problem where the principal is the seller of a good with a value function v = t − 2 q where t is the price charged for a bundle and 2 q is the cost of the bundle that contains q units of the √ good. A buyer of type θ has a utility function u ( q , t ) = θ q − t , where θ is either 16 or 20 with probability...

Let’s say that a seller has a house she wants to sell for $150,000. She asks...

Let’s say that a seller has a house she wants to sell for $150,000. She asks the real estate agent to list it for sale at $160,000, but tells the agent not to entertain any bid below $140,000. An interested buyer, who can afford a mortgage at current rates if the total price is below $145,000 (his limit), looks at the house and likes it enough to put in an offer of $138,000. This situation could be characterized as: Group...

A seller wishes to auction a single unit of an indivisible object. She can do so...

A seller wishes to auction a single unit of an indivisible object. She can do so in one of the following two ways (i) through a first-price auction to n bidders, (ii) through a second-price auction with optimally chosen reserve price to n - 1 bidders. Each bidder's valuation is private information and is an independent draw from the uniform distribution on [0, 1]. The seller values the object at 0. (a) Which of the two alternatives would you recommend...

In general the formula for cash-on-the-table for a unit of a good not traded is Group...

In general the formula for cash-on-the-table for a unit of a good not traded is Group of answer choices Buyer's reservation price less seller's reservation price Buyer's reservation price multiplied by the seller's reservation price Seller's reservation price less Buyer's reservation price Seller's reservation price divided by the Buyer's reservation price Buyer's reservation price plus seller's reservation price Buyer's reservation price divided by Seller's reservation price

Used car market, we have sellers who only sell good cars and sellers who sell lemons....

Used car market, we have sellers who only sell good cars and sellers who sell lemons. Value Seller buyer Good car 1500 2000 Lemon 600 400 If you are a good car dealer and successfully sold a good car, what is the profit? Under symmetric information, will the lemon owner be able to make profits? Under asymmetric information, the only information buyers have is there are 50% bad cars and 50% lemons in the market. For a risk neutral buyer,...

Huntington Manufacturing manufactures a single product that it will sell for $83 per unit. The company...

Huntington Manufacturing manufactures a single product that it will sell for $83 per unit. The company is looking to project its operating income for its first two years of operations. Cost information for the single unit of its product is as follows: direct material per unit produced $33 Direct labor cost per unit produced $13 Variable manufacturing overhead (MOH) per unit produced $7 Variable operating expenses per unit sold $3 Fixed manufacturing overhead (MOH) for each year is $294,000, while...

Q3: Consider a seller of Christmas trees at a unit price of 30 dollars. He purchases...

Q3: Consider a seller of Christmas trees at a unit price of 30 dollars. He purchases the trees from a farm for 10 dollars each. Transportation of a tree from the farm to the seller costs 2 dollars per tree. The seller takes an imputed entrepreneurial salary of 10,000 dollars into account. Every season, he has to pay a rent of 2,000 dollars for his store. Unsold trees have to be processed to sawdust at the cost of 1 dollar...

Given the demand curve it faces, if an imperfectly competitive firm wants to sell another unit...

Given the demand curve it faces, if an imperfectly competitive firm wants to sell another unit of output, it must: Multiple Choice increase the value of its product. increase its advertising. lower its quality. lower its price.

Question