Solution A
Keeping a bid too high above the valuation of product is weakly dominated because higher thr bid by one buyer will cause other buyer to bid more in search of winning the bid. In this case the person with highest bid gets the productaat second highest bid price plus the spread cost. This results in higher cost of product than its valuation making it less attractive .
Solution B
If the buyer bids well below the product value in order to save money and get it at least cost, his bid may get ujdermined and ignored because he is unaware if the competitive bid. Hence this strategy too becomes ineffective
Solution C
EBay auction policy is seller biased and needs tweak into policies. The auction policy should have threshold rates beyond which buyers cannot bid so that rates are competitive. The threshold bid should not be revealed untill buyer reaches the point of threshold . The highest bidder who first crosses the threshold now shall havr maximum probability of winning the product on basis of sealed bid auction strategy where the highest number in sealed bid wins the product.
Question 1: eBay's Recommendation It is hard to imagine that anyone is not familiar with eBay,...
(Ebayís Recommendation): It is hard to imagine that anyone is not familiar with eBay, the most popular auction website by far. In a typical eBay auction, a good is placed for sale, and each bidder places a ìproxy bidî, which eBay keeps in memory. If you enter a proxy bid that is lower than the current highest bid, then your bid is ignored. If, however, it is higher, then the current bid increases up to 1 cent above the second...
please help answer 3. eBay, the online auction site, describes its bidding system in the following way (I literally copied it from eBay's website with very minor edits only): "Our max bidding system makes bidding convenient so you don't have to keep coming back to re-bid every time someone places another bid. ... When you place a bid, you enter the maximum amount you're willing to pay for the item. The seller and other bidders don't know your maximum bid....
Suppose you are a bidder in a first-price sealed-bid auction for a single object, where players submit bids simultaneously and the player who bid the highest wins the object and must pay his/her bid. Assume there are two other bidders, so this is a three-player game. You do not observe the valuations of the other bidders, but assume that you believe their valuations are identically and independently distributed according to a uniform distribution on the interval from 0 to 20....
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usion (24 points) Two firms are playing a repeated Bertrand game infinitely, each with the same marginal cost 100. The market demand function is P-400-Q. The firm who charges the lower price wins the whole market. When both firms charge the same price, each gets 1/2 of the total market. I. Coll A. (6 points) What price will they choose in the stage (only one period) Nash equilibrium? What price will they choose if in the stage game (only one...
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