Question: Consider a first price sealed bid auction with two bidders with valuations distributed uniformly in the interval [0, 1]. Suppose the valuation of the player

Consider a first price sealed bid auction with two bidders with valuations distributed uniformly in the interval [0, 1]. Suppose the valuation of the player i is 0.661 and the valuation of player k is 0.48924 and bids are linear on the bidders' valuations. a If bidders are risk neutral, what are the Nash equilibrium bids? (1 points) b) How much is their Payoff? (1 point) c) Now suppose they are risk averse. Are bidders more or less aggressive than when they are risk neutral? Interpret your answer (1 point)

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