Consider an all-pay, sealed-bid auction where the item goes to the highest bidder and all of the buyers pay what they bid. Assume that buyer valuations follow a uniform(0,1) distribution. Use the revenue equivalence theorem to find the symmetric equilibrium bidding strategy b(v). Show the bidding function b(v) and your work in deriving it.
Consider an all-pay, sealed-bid auction where the item goes to the highest bidder and all of the buyers pay what they bid. Assume that buyer valuations follow a uniform(0,1) distribution. Use the revenue equivalence theorem to find the symmetric equilibrium bidding strategy b(v). Show the bidding function b(v) and your work in deriving it.
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter18: Auctions
Section: Chapter Questions
Problem 5MC
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Q3 Revenue equivalence
Consider an all-pay, sealed-bid auction where the item goes to the highest bidder and all of the buyers pay what they bid. Assume that buyer valuations follow a uniform(0,1) distribution. Use the revenue equivalence theorem to find the symmetric equilibrium bidding strategy b(v). Show the bidding function b(v) and your work in deriving it.
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