Consider the following sealed-bid private-values auction setting: N 2 bidders simultaneously submit a bid, b,, for...

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Consider the following sealed-bid private-values auction setting: N≥ 2 bidders simultaneously submit a bid, b,, for an object after getting their own valuation for the object, u,, where u, is independently drawn from the uniform [0, 25] distribution. (a) Suppose the price for the object is determined by the second-price sealed-bid format. Explain why it is a (weakly) dominant strategy for bidders to bid their value in this case. What is the expect revenue for the seller? Consider the following sealed-bid private-values auction setting: N≥ 2 bidders simultaneously submit a bid, b,, for an object after getting their own valuation for the object, u,, where u, is independently drawn from the uniform [0, 25] distribution. (a) Suppose the price for the object is determined by the second-price sealed-bid format. Explain why it is a (weakly) dominant strategy for bidders to bid their value in this case. What is the expect revenue for the seller?

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A bidders weakly dominant strategy in this case is to bid their true value v because they cannot do ... View the full answer