Managerial Economics & Business Strategy (Mcgraw-hill Series Economics)
9th Edition
ISBN: 9781259290619
Author: Michael Baye, Jeff Prince
Publisher: McGraw-Hill Education
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Question
Chapter 12, Problem 7CACQ
a.
To determine
To find: The first price, sealed bid auction.
b.
To determine
To find: The optimal bidding strategy for auction.
c.
To determine
To find: The optimal bidding strategy for second price, sealed bid auction.
d.
To determine
To find: The optimal bidding strategy for English auction.
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You are one of five risk-neutral bidders participating in an independent private values auction. Each bidder perceives that all other bidders’ valuations for the item are evenly distributed between $10,000 and $30,000. For each of the following auction types, determine your optimal bidding strategy if you value the item at $22,000. a. First-price, sealed-bid auction. b. Dutch auction. c. Second-price, sealed-bid auction. d. English auction.
You are a bidder in an independent private values auction, and you value the object at $4,500. Each bidder perceives that valuations are uniformly distributed between $1,000 and $10,000. Determine your optimal bidding strategy in a first-price, sealed-bid auction when the total number of bidders (including you) is:
a. 2 bidders.Bid: $ b. 10 bidders.Bid: $ c. 100 bidders.Bid: $
How to solve this question?
Consider an antique auction where bidders have independent private values. There are two bidders, each of whom perceives that valuations are uniformly distributed between $100 and $1,000. One of the bidders is Sue, who knows her own valuation is $200. What is Sue's optimal bidding strategy in a Dutch auction?
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Managerial Economics & Business Strategy (Mcgraw-hill Series Economics)
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