Consider the two bidder auction environment

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Consider the two-bidder auction environment discussed, where the bidders' values are independently drawn and distributed uniformly on the interval [0, 900].

Demonstrate that, by setting a reserve price, the auctioneer can obtain an expected revenue that exceeds what he would expect from the standard first- and second-price auctions. You do not have to compute the optimal reserve price or the actual equilibrium strategies to answer this question.

Reference no: EM131250087

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