Question

Show that bidding your true valuation is a weakly dominant strategy in the second price auction.

Show that bidding your true valuation is a weakly dominant strategy in the second price auction.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Please refer to the attached images for detailed solution.

Please leave a thumbs up if the solution is helpful.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A second-price sealed-bid auction is an auction in which every bidder submits his or her bid...
A second-price sealed-bid auction is an auction in which every bidder submits his or her bid to the auctioneer, the auctioneer announces the winner to be the bidder who submits the highest bid, and the winner pays the highest bid among the losers. Is the following statement True, False, or Uncertain? Explain why. Every player has a weakly dominant strategy in second-price auction.
You are a bidder in an independent private values auction. Each bidder perceives that valuations are...
You are a bidder in an independent private values auction. Each bidder perceives that valuations are evenly distributed between $100 and $1,000. If there is a total of three bidders and your own valuation of the item is $900, describe your strategy (how you would behave) and your optimal bidding in: a. A first-price, sealed-bid auction. b. A Dutch auction. c. A second-price, sealed-bid auction. d. An English auction. Explain and/or show your work.
I am holding a sealed-bid, second-price auction for a coupon worth one month of free coffee...
I am holding a sealed-bid, second-price auction for a coupon worth one month of free coffee at Uncommon Grounds. You spend $50 on coffee each month, so your private value of this coupon is exactly $50. However, you learn that the other students in COSC 018 are planning to collude in the auction and bid only 10% of their true values in an attempt to lower the cost of coffee on campus. With this information, what should your bidding strategy...
Consider a 1st-Price Sealed-Bid auction: all players submit sealed bids, and the object is awarded to...
Consider a 1st-Price Sealed-Bid auction: all players submit sealed bids, and the object is awarded to the highest bidder who pays his/her bid. Is bidding one’s true willingnessto-pay still a dominant strategy?
Consider 45 risk-neutral bidders who are participating in a second-price, sealed-bid auction. It is commonly known...
Consider 45 risk-neutral bidders who are participating in a second-price, sealed-bid auction. It is commonly known that bidders have independent private values. Based on this information, we know the optimal bidding strategy for each bidder is to: A. bid their own valuation of the item. B. shade their bid to just below their own valuation. C. bid according to the following bid function: b = v − (v − L)/n. D. bid one penny above their own valuation to ensure...
Private Value First Price Auction There are 4 bidders in a first price auction: player 1,...
Private Value First Price Auction There are 4 bidders in a first price auction: player 1, 2, 3 and 4. You are player 1 and your private value of the object is 0.8. You believe that the values of player 2, 3, and 4 are uniformly distributed between [0,1]. If you win by bidding b, your payoff is 0.8-b. Your opponents’ bidding strategy can be represented by avi, i=2,3, with vi the corresponding private value of each of your opponents,...
Please explain thoroughly. Which of the following is true about contracts as a barrier to entry?...
Please explain thoroughly. Which of the following is true about contracts as a barrier to entry? (a) A buyer should never agree to an exclusive contract with a monopolist seller (b) A buyer will sometimes find it worthwhile to sign a contract with an monopolist seller upstream that prevents entry upstream (c) Exclusive deals always result in lower consumer surplus (d) An exclusive deal between two parties makes it less likely that they will enter into relationship- specific investments Which...
1. In a sealed??bid,second?price ?auction, you should bid A. your estimate of what others value the...
1. In a sealed??bid,second?price ?auction, you should bid A. your estimate of what others value the good at. B. the common value of the good. C. your highest value. D.one dollar more than your estimate of what the second-highest bid will be. 2. An auction in which the price announced by the auctioneer DESCENDS is called a A.Dutch Auction. B.Descending Option Auction. C.Sealed Bid Auction. D.English Auction 3.The ability to deter entry requires A. a good lawyer. B. a credible...
. In the 2nd-Price Sealed-Bid auction, the highest bidder wins, but pays a price equal to...
. In the 2nd-Price Sealed-Bid auction, the highest bidder wins, but pays a price equal to the second-highest bid. So why wouldn’t a player simply submit an absurdly large bid, thus increasing the likelihood of winning - after all, she doesn’t pay this bid. In other words, consider a player whose true valuation is 10, but who bids 100.
You are a bidder in an independent private values auction, and you value the object at...
You are a bidder in an independent private values auction, and you value the object at $5,500. Each bidder perceives that valuations are uniformly distributed between $1,000 and $9,000. Determine your optimal bidding strategy in a first-price, sealed-bid auction when the total number of bidders (including you) is: a. 2 bidders. Bid: $______ b. 10 bidders. Bid: $______ c. 100 bidders. Bid: $______
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT