2) Assume there are two bidders who are competing at a private-value auction, decidedby a sealed bid, first price mechanism. Let v and b; denote your valuation and bid and let vand bj denote the valuation and bid of the other bidder. If you outbid your opponent (bi> b), yourpayoff is (v- bì), otherwise zero. While your opponent's valuation is private information andunknown, you know that it is uniformly distributed between 0 and 1, thus F(v)= P(v < v) = v. Youalso believe that the other bidder bids according to the function b(v) = v. Assuming yourvaluation is v= 3/5, what is your optimal bid? How will your optimal bid change with additionalcompetitors in the auction? Justify your rationale.

The complete solution is in given below

Answered: 2) Assume there are two bidders who are…

College Algebra

10th Edition

ISBN:9781337282291

Author:Ron Larson

Publisher:Ron Larson

Chapter8: Sequences, Series,and Probability

Section8.6: Counting Principles

Problem 74E: Lottery Powerball is a lottery game that is operated by the Multi-State Lottery Association and is...

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Lottery Powerball is a lottery game that is operated by the Multi-State Lottery Association and is played in 44 states, Washington D.C., Puerto Rico, and the U.S. Virgin Islands. The game is played by drawing five white balls out of a drum of 69 white balls (numbered 1-69) and one red powerball out of a drum of 26 red balls (numbered 1-26). The jackpot is won by matching all five white balls in any order and the red powerball. (a) Find the possible number of winning Powerball numbers. (b) Find the possible number of winning Powerball numbers when you win the jackpot by matching all five white balls in order and the red powerball.
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