You are a bidder in an independent private auction, and you value the object at $2000. Each bidder assumes that the valuations are uniformly distributed between $1000 and $5000. Determine your optimal...
You are a bidder in an independent private auction, and you value the object at $2000. Each bidder assumes that the valuations are uniformly distributed between $1000 and $5000. Determine your optimal bidding strategy in a first-price sealed bid auction when the total number of bidders are: 2, 10, and 100.
Homework Answers
Total value of object = $2000
Lowest possible bidding = $1000
Highest possible bidding = $5000
Optimum bidding strategy
Optimum seal bid = Lowest possible valuation would be = $1000
Maximum value we can give = $2000
Maximum value - [ ( Maximum value - Lowest bid price ) No of bidders ]
When there are 2 Bidders = $2000 - [( $2000 - $1000 ) / 2] = $1500
When there are 10 Bidders = $2000 - [ ( $2000 - $1000) / 10 ] = $1900
When there are 100 Bidders = $2000 - [ ( $2000 - $1000 ) / 100 ] = $1990
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You are a bidder in an independent private auction, and you value the object at $2000. Each bidder assumes that the valuations are uniformly distributed between $1000 and $5000. Determine your optimal...
You are a bidder in an independent private auction, and you value the object at $2000....
You are a bidder in an independent private auction, and you value the object at $2000. Each bidder assumes that the valuations are uniformly distributed between $1000 and $5000. Determine your optimal bidding strategy in a first-price sealed bid auction when the total number of bidders are: 2, 10, and 100.
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