Consider an auction with two partcipants, each of them with the following Valuation of the good...
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Consider an auction with two partcipants, each of them with the following Valuation of the good for sale. Individual A values the good for sale at K50 and B values at K60. If the seller organizes an FPA, who will win and what will be the winning bid? What will be the price she has to pay? ii. What if individual A is able to observe individual B's Valuation before the auction. What will A's bid? Suppose that both bidders have a utility function U(x) = x0.4 and the seller still organises an FPA who will be the winner of the auction and what will be the winning bid and price of the auction? Given the information given in (iv) and suppose individual A was able to observe B valuation what will be A's bid? For what degree of risk aversion would induvial A not want to change the bid given in (v)? iv. V. vi. Consider an auction with two partcipants, each of them with the following Valuation of the good for sale. Individual A values the good for sale at K50 and B values at K60. If the seller organizes an FPA, who will win and what will be the winning bid? What will be the price she has to pay? ii. What if individual A is able to observe individual B's Valuation before the auction. What will A's bid? Suppose that both bidders have a utility function U(x) = x0.4 and the seller still organises an FPA who will be the winner of the auction and what will be the winning bid and price of the auction? Given the information given in (iv) and suppose individual A was able to observe B valuation what will be A's bid? For what degree of risk aversion would induvial A not want to change the bid given in (v)? iv. V. vi.
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i In a FirstPrice Auction FPA the highest bidder wins the auction and the winning bid is the highest bid made by the winner In this case individual B ... View the full answer
Related Book For
Managerial Economics A Problem Solving Approach
ISBN: 978-1133951483
3rd edition
Authors: Luke M. Froeb, Brian T. McCann, Mikhael Shor, Michael R. War
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