Answered You can hire a professional tutor to get the answer.
QUESTION
Game Theory: An item is going up for auction. There are two bidders, and each can be one of two types, Rich and Poor. We know the following about the...
Game Theory:
An item is going up for auction. There are two bidders, and each can be one of two types, Rich and Poor. We know the following about the bidders:
- A Rich bidders is willing to pay $120.
- A Poor bidders is willing to pay $100.
- Poor bidders make up 60% of the bidders.
If the item is sold using an Ascending Auction:
- Describe the dominant bidding strategy for each player.
- Assuming a Rich bidder is in the auction, what would be the probability of a that Rich bidder winning the auction?
- What would be the expected payment of a Rich bidder?
- What would be the expected surplus of a Rich bidder?
- Assuming a Poor bidder is in the auction, what would be the probability of that Poor bidder winning the auction?
- What would be the expected payment of a Poor bidder?
- What would be the expected surplus of a Poor bidder?
If the item is sold using an Descending Auction:
- Describe the dominant bidding strategy for each player.
- Assuming a Rich bidder is in the auction, what would be the probability of a that Rich bidder winning the auction?
- What would be the expected payment of a Rich bidder?
- What would be the expected surplus of a Rich bidder?
- Assuming a Poor bidder is in the auction, what would be the probability of that Poor bidder winning the auction?
- What would be the expected payment of a Poor bidder?
- What would be the expected surplus of a Poor bidder?
