Question: 2. Two bidders each acquire a private signal, v; that is independently and uniformly dis- tributed over [0, 1]. (With the uniform distribution, ([0, 1],

2. Two bidders each acquire a private signal, v; that is independently and uniformly dis- tributed over [0, 1]. (With the uniform distribution, ([0, 1], the probability a random number is below any number, & is r. And the expected value of a number that is uniformly distributed over the interval, [0, x] is x/2.) The bidders attempt to acquire a single object at a second price auction. The value to bidder 1 of the object (WTP) when the two signals are (v1, v2) is 10(v1 + ov2). Similarly, the value to bidder 1 of the object (WTP) when the two signals are (v1, v2) is 10(v2 + av). a is a number between 0 and 1 that varies below. i) (5 points) Suppose o = 0. What type of auction model is this? ii) (5 points) For a = 0, find the Bayesian Nash Equilibrium of the second price auction. iii) (5 points) Suppose a = 1. What type of auction model is this? iv) (5 points) For any 0
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