Suppose your firm is in need of cash and plans to auction off a subsidiary to the highest bidder. Which type of auction will maximize your firm’s revenues from the sale if (1) The bidders are risk neutral and have independent private valuations? (2) The bidders are risk neutral and have affiliated value estimates?

Suppose your firm is in need of cash and plans to auction off a subsidiary to the highest bidder. Which type of auction will maximize your firm’s revenues from the sale if (1) The bidders are risk neutral and have independent private valuations? (2) The bidders are risk neutral and have affiliated value estimates?

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 9MC

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