Question: Let us modify the two-bidder example in the previous question and allow only two possible bids, 0 or 1. (a) In a first-price auction, what

Let us modify the two-bidder example in the previous question and allow only two possible bids, 0 or 1.

(a) In a first-price auction, what are the symmetric Nash equilibria?

(b) In a second-price auction, is bidding one's true valuation still a weakly dominant strategy? Conclude whether or not the strategy profile in which each bidder bids one's true valuation is a Nash equilibrium.

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