Question 4 Consider a first-price, sealed bid auction for a painting. There are two bidders, Henry and Paul. A bidder's valuation is 200 with probability .5 and 300 with probability.5. The auctioneer will award the painting to the bidder who submits the highest bid; if Henry and Paul submit the same bid the auctioneer will flip a coin to determine the winner. A bidder's payoff is the difference between his valuation and his bid if he wins and zero if he loses. The auctioneer tells Henry and Paul that the bids must be multiples of 100 and so the set of allowed bids is 0, 100, 200, 300, 400, and so on. Determine whether there is a symmetric Bayes Nash equilibrium where a bidder bids 100 if her valu- ation is 200 and bids 200 if her valuation is 300. Defend your answer carefully. Question 4 Consider a first-price, sealed bid auction for a painting. There are two bidders, Henry and Paul. A bidder's valuation is 200 with probability .5 and 300 with probability.5. The auctioneer will award the painting to the bidder who submits the highest bid; if Henry and Paul submit the same bid the auctioneer will flip a coin to determine the winner. A bidder's payoff is the difference between his valuation and his bid if he wins and zero if he loses. The auctioneer tells Henry and Paul that the bids must be multiples of 100 and so the set of allowed bids is 0, 100, 200, 300, 400, and so on. Determine whether there is a symmetric Bayes Nash equilibrium where a bidder bids 100 if her valu- ation is 200 and bids 200 if her valuation is 300. Defend your answer carefully