Consider a second price sealed bid auction for a single indivisible good with two bidders, where each bidder's valuation for the good is uniformly distributed on 0,1 and bidders only know their own valuation Suppose the seller's valuation for the good is zero Which of the following statements are true, which are false If each buyer bids his valuation for the good, then there are no unexploited gains from trade after the auction (2 ) True false There is an equilibrium in which one buyer bids 0 regardless of his valuation and the other buyer bids 1 regardless of his valuations (2 ) True false If a bidder increases his her bid, s he increases both the chance to obtain the good and the price s he must pay conditional on winning the auction (2 ) True false

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Question: Consider a second price sealed bid auction for a single indivisible good with two bidders, where each bidder's valuation for the good is uniformly distributed

Consider a second price sealed bid auction for a single indivisible good with two bidders, where each bidder's valuation for the good is uniformly distributed on [0,1] and bidders only know their own valuation. Suppose the seller's valuation for the good is zero. Which of the following statements are true, which are false?

If each buyer bids his valuation for the good, then there are no unexploited gains from trade after the auction. (2%)	True/false
There is an equilibrium in which one buyer bids 0 regardless of his valuation and the other buyer bids 1 regardless of his valuations. (2%)	True/false
If a bidder increases his/her bid, s/he increases both: the chance to obtain the good and the price s/he must pay conditional on winning the auction. (2%)	True/false

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