Question

Suppose we are interested in bidding on a piece of land and we
know one other bidder is interested. The seller announced that the
highest bid in excess of $12,000 will be accepted. Assume that the
competitor’s bid x is a random variable that is uniformly
distributed between $12,000 and $17,000.

a. Suppose you bid $13,000. What is the probability that your
bid will be accepted?

b. Suppose you bid $16,000. What is the probability that your
bid will be accepted?

c. What amount should you bid to maximize the probability that
you get the property?

d. Suppose you know someone who is willing to pay you $18,000
for the property. Would you consider bidding less than the amount
in part (c)? Why or why not?

Answer #1

Suppose we are interested in bidding on a piece of land and we
know one other bidder is interested. The seller announced that the
highest bid in excess of $9,900 will be accepted. Assume that the
competitor's bid x is a random variable that is uniformly
distributed between $9,900 and $15,400.
Suppose you bid $12,000. What is the probability that your bid
will be accepted (to 2 decimals)?
Suppose you bid $14,000. What is the probability that your bid
will...

Suppose we are interested in bidding on a piece of land and we
know one other bidder is interested. The seller announced that the
highest bid in excess of $10,000 will be accepted. Assume that the
competitor's bid x is a random variable that is uniformly
distributed between $10,000 and $15,200.
a) Suppose you bid $12,000. What is the probability that your
bid will be accepted (to 2 decimals)?
b) Suppose you bid $14,000. What is the probability that your...

Suppose we are interested in bidding on a piece of land and we
know one other bidder is interested. The seller announced that the
highest bid in excess of $9,900 will be accepted. Assume that the
competitor's bid x is a random variable that is uniformly
distributed between $9,900 and $14,800.
Suppose you bid $12,000. What is the probability that your bid
will be accepted (to 2 decimals)?
Suppose you bid $14,000. What is the probability that your bid...

Suppose we are interested in bidding on a piece of land and we
know one other bidder is interested. The seller announced that the
highest bid in excess of $10,200 will be accepted.
Assume that the competitor's bid is a random variable that is
uniformly distributed between $10,200 and $15,000 .
Suppose you bid $12,000 . What is the probability that your bid
will be accepted (to 2 decimals)?
Suppose you bid $14,000. What is the probability that your bid...

Suppose we are interested in bidding on a piece of land and we
know one other bidder is interested. The seller announced that the
highest bid in excess of $25,000 will be accepted. Assume that the
competitor's bid x is a random variable that is uniformly
distributed between $25,000 and $30,000.
(a)
Suppose you bid $27,000. What is the probability that your bid
will be accepted?
(b)
Suppose you bid $29,000. What is the probability that your bid
will be...

Suppose you are interested in bidding on a piece of land and you
know that there are two more bidders interested. The seller
announced that the highest bid above $15,000 will be accepted.
Assume that the competitors can bid anywhere between $15,000 and
$25,000. None of the bidders know each other.
Note: Make sure to specify the random variable and its
distribution. Use the appropriate cumulative distribution table to
compute the probability.
(a) Take one of the competitor bidders. What...

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THE FALL OF ENRON: A STAKEHOLDER FAILURE
Once upon a time, there was a gleaming headquarters
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THE FALL OF ENRON: A STAKEHOLDER FAILURE
Once upon a time, there was a gleaming headquarters
office tower in Houston, with a giant tilted "£"' in front, slowly
revolving in the Texas sun. The Enron Corporation, which once
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