Question: (Dollar auction) An object that two people each value at v = 2, a positive integer, is sold in an auction. In the auction, the
(Dollar auction) An object that two people each value at v = 2, a positive integer, is sold in an auction. In the auction, the people take turns bidding; a bid must be a positive integer greater than the previous bid. On her turn, a player may pass rather than bid, in which case the game ends and the other player receives the object; Both player pay their last bids (if any). Each person's wealth is w = 3; neither player can bid more than her wealth. Model this auction as an extensive game and find the subgame-perfect equilibria.
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