Explain the uniform distribution

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Two players compete in a first-price sealed bid auction. Each player's valuation is vi = (1/3) + θi, where θi is known only to player i, but is drawn from a uniform distribution over [0,1]. Suppose Player 2 sets a bid at b2 = (1/3) + (1/2)θ2. Solve for Player 1's optimal bid (b1) that maximizes their expected payoff, as a function of θ1. Show all work.

Reference no: EM133124959

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