It is a Vickerey auctions in which dominant strategy is always
to reveal true value therefore
Firm 1s optimal bid is $11,000
Firm 2s optimal bid is $18,500
Firm 3's optimal bid is $14,000
Firm 2 wins the auction and pays the price $14,000
Suppose Firm 1, Firm 2, and Firm 3 are the only three firms interested in a...
Suppose three risk-neutral bidders, named 1, 2 and 3, are interested in purchasing a painting. The bidders' values are 12, 14 and 16. The bidders will compete in an auction. Suppose all bids must be made in increments of $1 and be between $5 and |$25 Who wins in a sealed-bid second price auction? What are the final price and the payoff to the winning bidder?
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...
There are three firms: firm 1, firm 2 and firm 3. Each firm i chooses the level of production qi. The market price is determined by market demand: p = 24 – 91 - 92 - 43. And the marginal cost of production is zero. (a) Suppose firm 1 moves first, then firm 2 moves and finally firm 3 moves. Each firm can observe the previous firms' production strategies. Find all the subgame perfect equilibria. (b) Suppose firm 1 moves...
#4 only please
ZOOM + 3. Suppose that Firm 1 and Firm 2 are Cournot competitors. Each still has a marginal cost of 2 and the inverse demand curve is given by: P 5 - .5Q. Calculate the equilibrium price and profit for both firms. Calculate the HHI 4. For the two firms in the previous question, suppose that Firm 1 lowers its marginal cost to 1. Calculate the new price and the prosit levels for each firm 5. Based...
1. Consider a three firm (n = 3) Cournot oligopoly. The market inverse demand function is p (Q) = 24 Q. Firm 1 has constant average and marginal costs of $12 per unit, while firms 2 and 3 have constant average and marginal costs of $15 per unit. a)Verify that the following are Nash equilibrium quantities for this market: q1 = 9 / 2 and q2 = q3 = 3 / 2 . b)How much profit does each firm earn...
fill in the blank
1)increase/decrease
2)increase/decrease
3)gain/loss
Suppose New Zealand is open to free trade in the world market for wheat. Because of New Zealand's small size, the demand for and supply of wheat in New Zealand do not affect the world price. The following graph shows the domestic wheat market in New Zealand. The world price of wheat is Pw = $250 per ton. On the following graph, use the green triangle (triangle symbols) to shade the area representing...