There is a first-priced auction where 3 players value object at v1=v2=90 and v3=70. Player with highest bid wins object and pays own bid. Player i's payoff is vi-bi. When there is a tie, winner is player with smallest number (ex. player 2 wins if ties with player 3). 1) Is (90,90,70) a Nash equilibrium? 2) Can player 3 win in a Nash equilibrium if it was second-price auction?
There is a first-priced auction where 3 players value object at v1=v2=90 and v3=70. Player with highest bid wins object and pays own bid. Player i's payoff is vi-bi. When there is a tie, winner is player with smallest number (ex. player 2 wins if ties with player 3). 1) Is (90,90,70) a Nash equilibrium? 2) Can player 3 win in a Nash equilibrium if it was second-price auction?
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
Chapter15: Strategic Games
Section: Chapter Questions
Problem 6MC
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There is a first-priced auction where 3 players value object at v1=v2=90 and v3=70. Player with highest bid wins object and pays own bid. Player i's payoff is vi-bi. When there is a tie, winner is player with smallest number (ex. player 2 wins if ties with player 3).
1) Is (90,90,70) a Nash equilibrium?
2) Can player 3 win in a Nash equilibrium if it was second-price auction?
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