4. An auctioneer holds a second-price auction for two bidders, Ann (A) and Bonnie (B), who have independent private values of the good 0 and 0. If a bidder wins, her payoff is her value 0 minus the price she pays, and if she loses, her payoff is 0. The values are independently and identically distributed, but otherwise you don't need to know the specific distributions to solve the problem. Ann and Bonnie's respective strategies are to bid some value be). that is, bid given their privately-known value (type). a. Explain what a second price auction is, who wins given some pair of bids b, and bg and what the winner pays. b. Why is a strategy where Ann bids above her own value e, weakly dominated by a strategy where she bids her value? c. Why is a strategy where Ann bids below her own value e, weakly dominated by a strategy where she bids her value?

4. An auctioneer holds a second-price auction for two bidders, Ann (A) and Bonnie (B), who have independent private values of the good 0 and 0. If a bidder wins, her payoff is her value 0 minus the price she pays, and if she loses, her payoff is 0. The values are independently and identically distributed, but otherwise you don't need to know the specific distributions to solve the problem. Ann and Bonnie's respective strategies are to bid some value be). that is, bid given their privately-known value (type). a. Explain what a second price auction is, who wins given some pair of bids b, and bg and what the winner pays. b. Why is a strategy where Ann bids above her own value e, weakly dominated by a strategy where she bids her value? c. Why is a strategy where Ann bids below her own value e, weakly dominated by a strategy where she bids her value?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

H6. Consider the GSP auction used by Google for selling its advertising slots. Suppose there are two slots and three bidders. The clicks received by slots 1 and 2 are 500 and 300, respectively. The three bidders 1,2, and 3 have values 10, 8, and 5 respectively for a click. As usual, we consider Symmetric Nash Equilibria (SNE). In particular, you need to focus on the SNE equilibrium bids that are optimal for Google. Write down the corresponding SNE bid submitted by bidder 2. Use the decimal representation, not the fraction.
I need question 3, question 2 is only for background informati
PLEASE CHECK THIS HOW TO SOLVE
PLEASE CHECK THIS HOW TO SOLVE PLEASE TEACH EXPLAIN STEP BY STEP how to take derivititive v'
PLEASE CHECK THIS HOW TO SOLVE
7.
Consider a market entry game with imperfect information as depicted in the following picture. 2. Market entry P, A, A, A, 1-p B, B, B, В. B, B, B, \B, 7 7 7 5 5 4 4 4 3 13 3 10 16 (a) Write down all strategies of the players. Transform the game into a normal-form. Find all pure strategy Nash equilibria. (b) Find all weak-perfect Bayesian Nash equilibria in pure strategies. Do not forget the systems of beliefs. Argue well if there is none.
Suppose that the following prisoner's dilemma game (stage game) is played repeatedly and players discount future payoffs with the common discount factor δ <1. a) Carefully specify the strategy spaces for both players, draw the extensive form game and find a subgame perfect Nash equilibrium when the stage game is played twice, and both players observe the outcome of the first play.
An object is sold in a first-price auction – thus, the highest bidder wins the object and price is equal to the highest bid. There are two bidders, an "Odd" bidder (player 1) and an "Even" bidder (player 2). The odd bidder must bid an odd integer between 1 and 9, while the Even bidder must bid an even integer between 2 and 10. (So the strategy sets are {1,3, ...,9} and {2,4, ..., 10}.) The value of the object to the Odd bidder is 8, and value of the object to the Even bidder is 7. The payoff to the winner is the value of the object minus the price, and the payoff to the loser is 0. (a) Write the game in its strategic form. (b) Find all Nash equilibria.
10. Here's another game that has interested researchers, especially those of the type who work in the Max Gluskin House on campus at UofT. It's also a two-player game, but this time the payment is integral to describing the game. There is no direct Researcher involvement in the game, other than potentially as the source of a payout. For the sake of describing the game, imagine that Anson and Kanav are our two players and that they are playing the game virtually via Zoom for bitcoins, denoted B. There are always two piles of bitcoin in play: a larger one and a smaller one. Ahead of the game Anson and Kanav decide the maximum number 2n of turns, for some n E N greater than or equal to 1. • During the first turn the large pile of bitcoin has 4 Band the smaller pile of bitcoin has 1 B. Anson can either take the bitcoin or pass. If Anson (4 B) takes the bitcoin he gets the larger pile, Kanav gets the smaller pile (1 B) and the game ends. If he passes, the size of each pile is doubled. • Now…
Suppose there are two bidders for a single object. Each bidder has a value for the object, v1 and v2, which is randomly drawn uniformly from 0 to 80. (Note that this means the probability that a value is 25 or lower is 25/80, and more generally, the probability that a value is k or lower is k/80). Bidders see their own values but not the values of their rival bidders. Consider a first price sealed bid auction where the winner of the object is the bidder who submits the highest bid and pays the price that he bid. Suppose that you are bidder 1 and you believe that your rival always bids a constant fraction α of his value. (For example, if bidder 2’ value is 15, he will bid 15α.). 1. What is your expected winning probability of the auction from any given bid b1? (Hint, you win the auction when your bid amount b1 is greater than your opponent’s bid). 2. What is your expected payoff from any given bid, b1? (You need to write your answer as a function of v1, b1, and α). 3. Compute your best…
Answer correctly with in 50minutes