Case 1 (First Price Auction): In this case, the winner of the object pays whatever she bids.
Question:
Case 1 (First Price Auction): In this case, the winner of the object pays whatever she bids.
Case 2 (Second Price Auction): In this case, the winner of the object pays whatever the other player bids.
Answer the following questions for both Case 1 and Case 2:
(a) (10 points) Write down the strategic form.
(b) (10 points) Is there a strictly dominant strategy equilibrium of this game? Explain.
(c) (10 points) Is there a weakly dominant strategy equilibrium of this game? Explain.
(d) (10 points) What are the action profiles that survive Iterated Elimination of Strictly Dominated actions? Explain.
(e) (10 points) What are the action profiles that survive Iterated Elimination of Weakly Dominated actions? Explain.
(f) (10 points) Is the game dominance solvable?
Expert Answer:
To answer the questions we need to analyze Case 1 First Price Auction and Case 2 Second Price Auction separately Case 1 First Price Auction a Strategi... View the full answer
