Question: Consider a first - price sealed bid auction between two bidders ( ties are broken with equal probability ) . Each bidder may have a

Consider a first-price sealed bid auction between two bidders (ties are broken with equal probability). Each bidder may have a high valuation of H =10 with a probability of 0.6 or a low valuation of L =1 on the object being auctioned with a probability of 0.4. A bidder's valuation is her private information. (1) Suppose that the bid of each player can only be 1 or 10. Solve for the pure-strategy symmetric BNE (that is, regardless of identity, a bidder will use one bid when her type is L and another (possibly the same) bid when her type is H).(2) Now suppose that each player can bid any non-negative real number. Show that there is no pure-strategy symmetric BNE.

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