The U.S. government is auctioning the mining rights to a deposit of copper ore on federal...

 

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The U.S. government is auctioning the mining rights to a deposit of copper ore on federal land. The net economic value of the copper ore is $100 million but this fact is not known to anyone The government will auction the mining rights via a second-price, sealed bid auction. Suppose that each firm has an estimate of the value of winning the mining rights. Firm Estimate (millions of $) 80 2 120 3. 95 115 90 Suppose that each firm ignores the possibility that they could have misestimated the value of the mining rights (e.g., Firm 1 assumes that there is no chance that the actual value would be different from $80 million). Q3.1 2 Points Which firm will win the auction? 2 4 Save Answer 3. Q3.2 1 Point What would be the winning firm's surplus from the auction? Enter your answer as an integer. Enter your answer here Save Answer Q3.3 1 Point If bidders don't properly account for the winner's curse in an auction for an item that has uncertain value to bidders, why can it actually be a bad thing to win the auction? Enter your answer here Save Answer The U.S. government is auctioning the mining rights to a deposit of copper ore on federal land. The net economic value of the copper ore is $100 million but this fact is not known to anyone The government will auction the mining rights via a second-price, sealed bid auction. Suppose that each firm has an estimate of the value of winning the mining rights. Firm Estimate (millions of $) 80 2 120 3. 95 115 90 Suppose that each firm ignores the possibility that they could have misestimated the value of the mining rights (e.g., Firm 1 assumes that there is no chance that the actual value would be different from $80 million). Q3.1 2 Points Which firm will win the auction? 2 4 Save Answer 3. Q3.2 1 Point What would be the winning firm's surplus from the auction? Enter your answer as an integer. Enter your answer here Save Answer Q3.3 1 Point If bidders don't properly account for the winner's curse in an auction for an item that has uncertain value to bidders, why can it actually be a bad thing to win the auction? Enter your answer here Save Answer

Answer rating: 100% (QA)

ANSWER First one correct Second one is 20 million ... View the full answer