Q2 Anglo-Dutch auction 11 Points Consider an Anglo-Dutch auction in which one item is for sale....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Q2 Anglo-Dutch auction 11 Points Consider an Anglo-Dutch auction in which one item is for sale. In the first-round of the auction, buyers bid in an ascending-bid auction. The two buyers with the highest bids proceed to the second round. In the second round, the two remaining buyers submit sealed bids (that cannot be lower than the price at which the bidding stopped in the first round) and the buyer with the highest bid wins the item and pays what he or she bid. Valuations are drawn from the uniform(0, 1) distribution. The following table depicts the valuations for each buyer in the auction. Buyer # 1 2 3 4 5 6 7 8 9 10 17 0.13134 0.18293 0.18709 0.20800 0.33763 0.34580 0.35594 0.69384 0.77997 0.89265 Assume that buyers always bid according to the relevant symmetric equilibrium bidding strategy. Round all numeric answers to at least three decimal places. Q2.1 2 Points Which two buyers will go on to the second round of the auction? 1 2 3 4 5 LO LO 6 7 8 9 10 Save Answer Q2.2 3 Points In the first-round, what is the value of the highest bid? Round your answer to at least three decimal places. Enter your answer here Q2.3 4 Points In the second round with two buyers remaining, the probability that a buyer with valuation wins is -1, where N is the number of buyers in the first round. Use the revenue equivalence theorem to derive the symmetric equilibrium bidding function b(z) for the buyers in stage two. Show your work. Upload an image of your answer as a pdf file. Please select file(s) Select file(s) Q2.4 2 Points At the end of the auction what is the value of the actual (not expected) revenue that the seller receives? Round your answer to at least three decimal places. Enter your answer here Save Answer Q2 Anglo-Dutch auction 11 Points Consider an Anglo-Dutch auction in which one item is for sale. In the first-round of the auction, buyers bid in an ascending-bid auction. The two buyers with the highest bids proceed to the second round. In the second round, the two remaining buyers submit sealed bids (that cannot be lower than the price at which the bidding stopped in the first round) and the buyer with the highest bid wins the item and pays what he or she bid. Valuations are drawn from the uniform(0, 1) distribution. The following table depicts the valuations for each buyer in the auction. Buyer # 1 2 3 4 5 6 7 8 9 10 17 0.13134 0.18293 0.18709 0.20800 0.33763 0.34580 0.35594 0.69384 0.77997 0.89265 Assume that buyers always bid according to the relevant symmetric equilibrium bidding strategy. Round all numeric answers to at least three decimal places. Q2.1 2 Points Which two buyers will go on to the second round of the auction? 1 2 3 4 5 LO LO 6 7 8 9 10 Save Answer Q2.2 3 Points In the first-round, what is the value of the highest bid? Round your answer to at least three decimal places. Enter your answer here Q2.3 4 Points In the second round with two buyers remaining, the probability that a buyer with valuation wins is -1, where N is the number of buyers in the first round. Use the revenue equivalence theorem to derive the symmetric equilibrium bidding function b(z) for the buyers in stage two. Show your work. Upload an image of your answer as a pdf file. Please select file(s) Select file(s) Q2.4 2 Points At the end of the auction what is the value of the actual (not expected) revenue that the seller receives? Round your answer to at least three decimal places. Enter your answer here Save Answer
Expert Answer:
Answer rating: 100% (QA)
To determine the answers to the questions lets analyze the given information step by step Q21 Which ... View the full answer
Posted Date:
Students also viewed these economics questions
-
Consider an ideal Stirling-cycle engine in which the state at the beginning of the isothermal compression process is 100 kPa, 25C, the compression ratio is 6, and the maximum temperature in the cycle...
-
Consider an ideal Sterling-cycle engine in which the pressure and temperature at the beginning of the isothermal compression process are 14.7 lbf/in 2, 80 F, the compression ratio is 6, and the...
-
Consider an overlapping generations economy in which endowments increase over time. Let y t = y t-1 , where > 1 Endowments are received by young people while old people receive no endowment....
-
BT is considering investing in government bonds. The current price of a P100 bond with 10 years to maturity is P88. The bonds have a coupon rate of 6% and repay face value of P100 at the end of the...
-
A key hospital outcome measure of clinical performance is length of stay (LOS); that is, the number of days a patient is hospitalized. For patients at one hospital with acute myocardial infarction...
-
A refrigerator used by a meat processor has a cost of $312,000, an estimated residual value of $42,000, and an estimated useful life of 15 years. What is the amount of the annual depreciation...
-
Startups do well in crowded industries under two conditions: (1) they create meaningful value for customers at a fair price and (2) they differentiate themselves from competitors in ways that create...
-
James Secretarial Services is considering the purchase of one of two new personal computers, P and Q. The company expects both to provide benefits over a 10-year period, and each has a required...
-
A ( n ) _ _ _ _ _ _ _ _ _ _ contains a specific piece of information within a record. Field Entity Row Database
-
The L. Young & Sons Manufacturing Company produces two products, which have the following profit and resource requirement characteristics: Last months production schedule used 350 hours of labor in...
-
+ Question-1 int arr[] ={1, 3, 5, 7, 9, 11, 13, 15, 17, 19, 21, 23, 25, 27, 29, 31, 33, 35, 37, 39, 41, 43, 45, 47, 49}; Keys: 17 37 42 Algorithm Lab Taks Instructions: Implement a binary search...
-
Consider the calculation of an external rate of return (ERR). The positive cash flows in the cash flow profile are moved forward to \(t=n\) using what value of \(i\) in the \((F \mid P i, n-t)\)...
-
What is the internal rate of return of the following cash flow diagram? a. 20 percent b. 18.2 percent c. 17.5 percent d. 15 percent $30 $31 0 1 2 3 $30 $15
-
If the interest rate at B is 20 percent, then which of the following best describes the analysis of the investment? a. The IRR of the investment is less than 20 percent. b. The IRR of the investment...
-
Consider the following cash flow profile and assume MARR is 10 percent/year. a. What does Descartes' rule of signs tell us about the IRR(s) of this project? b. What does Norstrom's criterion tell us...
-
Consider the IRR and ERR measures of worth. If we define a root to mean a value for the measure that results in \(\mathrm{PW}=0\), then which of the following statements is true? a. Both IRR and ERR...
-
1. Convert the ER Model below into a relational database The ER model helps maintain a database of cookies sold by girl scouts. Number Troop Number Name (0,1) Service Unit (1,n) belongs to belongs to...
-
Simplify the expression. Assume that all variables are positive. 23VI1 2 V44 8
-
Which of Stosurs statements regarding ETF mechanics is correct? A. Statement 1 B. Statement 2 C. Statement 3 Howie Rutledge is a senior portfolio strategist for an endowment fund. Rutledge meets with...
-
Factor (smart beta) strategy ETFs are least likely to be used by investors: A. to modify portfolio risk. B. for tactical trading purposes. C. to seek outperformance versus a benchmark.
-
Which of the following statements regarding applications of ETFs in portfolio management is correct? A. Equity ETFs tend to be more active than fixed-income ETFs. B. The range of risk exposures...
Study smarter with the SolutionInn App