Q1.

Consider a second price auction for a single item with two bidders. Suppose bidder 1 has a value uniformly drawn in the interval from 0 to 1, while bidder 2 has a value 0.6.

In the Bayesian equilibrium in undominated strategies, what is the seller's expected revenue? Give your answer to two decimal places.

Q2

Amy (the row player) has just started dating Brad (column player). Each person can choose either to (C)ommit to the relationship, or (D)ump their partner and break up. Amy prefers a partner who will commit. Unfortunately, Amy knows there are two types of men in the world: Gentlemen and Playboys. She doesn't yet know Brad's type, but from experience, she assigns probability 3/4 to Brad being a Playboy and probability 1/4 that he is a Gentleman. Brad knows his own type. The payoffs for each action and type profile are given as follows: Brad is a Playboy (probability 3/4): Commit Dump Commit 10 , 0 - 10 , 10 Dump 0 , - 10 0 , 10 Brad is a Gentleman (probability 1/4): Commit Dump Commit 10 , 10 - 10 , 0 Dump 0, - 10 0 , 0 What is the unique Bayesian-Nash equilibrium of this game? O (C, CC) O (D, DD) O (C, DC) O (C, DD) O (D, DC)