subject
Business, 07.08.2021 05:00 sxbenn

You hold an oral, or English, auction among three bidders. You estimate that each bidder has a value of either $12 or $15 for the item, and you attach probabilities to each value of 50%. The winning bidder must pay a price equal to the second highest bid. The following table lists the eight possible combinations for bidder values. Each combination is equally likely to occur.
***On the following table, indicate the price paid by the winning bidder.***
Bidder 1 Value Bidder 2 Value Bidder 3 Value
Probability Price
($) ($) ($)
$12 $12 $12 0.125
$12 $12 $15 0.125
$12 $15 $12 0.125
$12 $15 $15 0.125
$15 $12 $12 0.125
$15 $12 $15 0.125
$15 $15 $12 0.125
$15 $15 $15 0.125
The expected price paid is ?
Suppose that bidders 1 and 2 collude and would be willing to bid up to a maximum of their values, but the two bidders would not be willing to bid against each other. The probabilities of the combinations of bidders are still all equal to 0.125. Continue to assume that the winning bidder must pay a price equal to the second highest bid.
On the following table, indicate the price paid by the winning bidder.
Maximum of Bidder 1 and 2 Bidder 3 Value
Probability Price
($) ($)
$12 $12 0.125
$12 $15 0.125
$15 $12 0.125
$15 $15 0.125
$15 $12 0.125
$15 $15 0.125
$15 $12 0.125
$15 $15 0.125

ansver
Answers: 2

Another question on Business

question
Business, 21.06.2019 15:00
When consumers discard their gasoline-powered automobiles for electric-powered ones, this partially reflects the of gasoline?
Answers: 1
question
Business, 22.06.2019 05:00
What is a sort of auction for stocks in which traders verbally submit their offers?
Answers: 3
question
Business, 22.06.2019 05:30
Identify the three components of a family's culture and provide one example from your own experience
Answers: 2
question
Business, 22.06.2019 05:50
Match each of the terms below with an example that fits the term. a. fungibility the production of gasoline b. inelasticity the switch from coffee to tea c. non-excludability the provision of national defense d. substitution the demand for cigarettes
Answers: 2
You know the right answer?
You hold an oral, or English, auction among three bidders. You estimate that each bidder has a value...
Questions
question
Chemistry, 25.08.2021 22:10
question
Mathematics, 25.08.2021 22:10
question
Physics, 25.08.2021 22:10
question
History, 25.08.2021 22:10
question
Mathematics, 25.08.2021 22:10
question
Mathematics, 25.08.2021 22:10
Questions on the website: 13722363