2 b. For the following IS/LM model, express the IS and LM equations as equal to zeroand use the IFT to determine the sign of or/@Go. Identify the Jacobian andexplain each step. What assumptions are you making?C = C(Y),I = 1(Y,r), G = GoMD = L(Y,r), MS = Mo%3D%3D%3D

In order to demonstrate that the strategy profile where each buyer bids in accordance with B(v) =…

(a) Argue that the strategy profile in which each buyer bids according to the function B defined by B(v) = v/2 is not a Nash equilib- rium. Hint: Find a profitable deviation for some v € [0, 1]. (b) Suppose the seller uses a posted price p. What is her expected revenue? Which price maximizes her expected revenue? Hint: What is the probability of at least one buyer is willing to pay p? (c) Recall that in the first price auction, the seller's expected revenue is (n-1)/(n+1). Compare the seller's revenue from the first-price auction and that from posted-price selling.

(a) Argue that the strategy profile in which each buyer bids according to the function B defined by B(v) = v/2 is not a Nash equilib- rium. Hint: Find a profitable deviation for some v € [0, 1]. (b) Suppose the seller uses a posted price p. What is her expected revenue? Which price maximizes her expected revenue? Hint: What is the probability of at least one buyer is willing to pay p? (c) Recall that in the first price auction, the seller's expected revenue is (n-1)/(n+1). Compare the seller's revenue from the first-price auction and that from posted-price selling.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter5: Business And Economic Forecasting

Section: Chapter Questions

Problem 1.6CE: Estimate the double-log (log linear) time trend model for log cruise ship arrivals against log time....

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