Question: 1. Consider two bidders simultaneously bidding on an item with sealed bids. Suppose there is complete information that valuations are V1= $28 and V2= $18.

1. Consider two bidders simultaneously bidding on an item with sealed bids. Suppose there is complete information that valuations are V1= $28 and V2= $18. All bids must be in multiples of $5.

a. What is the solution to this first-price auction?

b. What is the solution to the second price auction using the same data?

c. Suppose all bids must be in multiples of $1. What is the solution to the first-price auction?

d. What is the solution to the second price auction when bids are in multiples of $1?

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