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Unformatted text preview: n bidders when each bidder’s value is independently distributed on [0 , 1] according to CDF F ( x ) = x 2 . (a) What is the symmetric BNE? 5 (b) What is the seller’s expected revenue in equilibrium? 6 4. Allpay auction is an auction in which the highest bidder wins and every bidder must pay his or her own bid whether winning or losing the auction. Consider an allpay auction with n bidders, whose values are independently and uniformly distributed over [0 , 1] . (a) Derive the symmetric BNE. 7 (b) Find the optimal reserve price to maximize the seller’s revenue as a function of n (hint: you may use the revenue equivalence theorem). Also derive the symmetric BNE with this optimal reserve price. 8...
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 Winter '10
 Obara
 Auction, optimal reserve price, Ichiro Obara, symmetric BNE

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