Reference no: EM13992936
One of the bidders, let's say it is Alice, is a friend of the auctioneer. If Alice is not the high bidder then Alice loses, just like all the other low bidders. So far, nothing special. Now for the twist. If Alice is the high bidder, the auctioneer tells Alice this fact and lets her revise her bid.
Alice was not aware that this would happen and neither were any of the other bidders when they placed their bids. Moreover, the auctioneer is not without any ethics-he doesn't tell Alice what the next highest bid is.
Obviously Alice has no incentive to raise her bid since that would just lead her to pay more money. The question is should she lower her bid and if so, by how much. Recognize that if Alice lowers her bid too much so that she is no longer the high bidder then she no longer wins the auction and there is nothing her friend can do.
Although this behavior would be highly unethical and hence you might not want to take advantage of this option for that reason, I would like to know how you would use this information casting aside ethics for a moment.
One last simplification: just as in the first problem, you should assume that the value of the good is independent across the bidders so there is no issue of winner's curse. In figuring out how much to adjust the bid, if it helps, you can assume that there are only two bidders, Alice and Bob. And just like above, Alice thinks Bob's valuation is drawn from a uniform distribution between 0 and 100 and Bob, when formulating his bid, thinks that Alice's distribution is drawn from a uniform distribution between 0 and 100.
Write down your answer and, more importantly, your reasoning. All the points in this problem come from the reasoning part.
|
Who has the opposite opinion of yours in this instance
: Given the difference of opinions on the issue of forgiveness and revenge by mental health professionals and individuals in general, what are the ethical considerations if you are treating a patient who has the opposite opinion of yours in this ins..
|
|
How your organization determines and communicates objectives
: Reflect on what you have learned about the role of leadership and strategy from your interview. Analyze the importance of leadership in crafting and executing strategy. Incorporate meaningful research in your analysis; your research into strategy ..
|
|
The upward and downward movement of aggregate
: The upward and downward movement of aggregate output produced in the economy is referred to as the ________. A) roller coaster
|
|
Constructing a normal probability plot
: Comparing data characteristics to theoretical properties. Constructing a normal probability plot. Constructing a histogram.
|
|
A friend of the auctioneer
: One of the bidders, let's say it is Alice, is a friend of the auctioneer. If Alice is not the high bidder then Alice loses, just like all the other low bidders. So far, nothing special. Now for the twist. If Alice is the high bidder, the auctioneer t..
|
|
P-value would be associated with the data
: Suppose Ho: px = py isbeingtested agrunst H1:Px *py oo the basis of two independent sets of 100 Bernoulli trials. If x , the number of successes in the first set, is 60 and y , the number of successes in the second set, is 48, what P-value would b..
|
|
Estimator of linear functions distributed
: How are the least squares estimator of linear functions distributed?
|
|
Statistical significance of the difference
: National League teams fared even worse-their attendance was down 15.1% (200). Based on the team-by-team attendance figures given below, would it be appropriate to use Lbe pooled two-sample t test of Theorem 9.22 to a Lbe statistical significance of..
|
|
What are the main limitations of unit root
: What are the main limitations of unit root test as a test for stationarity?
|