{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Problem_Session_10_Review

# Problem_Session_10_Review - MS&E 352 Decision Analysis II...

This preview shows pages 1–10. Sign up to view the full content.

MS&E 352 Decision Analysis II Problem Session 9

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Announcements Final Exam: Make sure that you understand all the tools and concepts from the class before the final (specifically CS3). The exam will be posted on Thursday, March 12 th , and due on Thursday, March 19 nd . No More Questions on Coursework: Good luck in the Final
On our agenda for today… Auctions & Bidding Decision Analysis Cycle & Tools Survey Questions

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Auctions & Bidding
Auctions involve some interesting and challenging decision problems. When there is no definitive market price for the object they are trying to sell. Can you imagine someone who would be trying to sell rice on eBay? When do people resort to auctions?

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
We studied 4 types of auctions, and their associated optimal strategies. 1 st price sealed bid 2 nd price sealed bid 1 st price, descending bidding 1 st price open ascending Auction Type Optimal Strategy PIBP – some amount b PIBP PIBP – some amount b Bid up to your PIBP
We studied 4 types of auctions, and their associated optimal strategies. 1 st price sealed bid 2 nd price sealed bid 1 st price, descending bidding 1 st price open ascending Auction Type Optimal Strategy PIBP – some amount b PIBP Bid up to your PIBP Auctions 1 and 3 are similar. Also – they are the challenging ones! ?

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Here is our Decision Diagram… Bid Underlying Uncertainty Max Competitive Bid Acquire \$
Proba to Acquire vs. Bid Amount 0.000 0.200 0.400 0.600 0.800 1.000 1.200 \$0.0 \$10.0 \$20.0 \$30.0 \$40.0 \$50.0 \$60.0 \$70.0 \$80.0 \$90.0 \$100. Here are the essential components of our model. .. φ denotes the long-term fraction of H when tossing the thumbtack. - -> Δ CDF(φ) PDF(φ) {φєΔ}*φ^2 {φєΔ}*(1-φ)^2 The proba density on φ is assumed to be Beta, with the fol owing parameters: Unfold to 0.0 0 0.0 0 0.00 0.0 0 0.00 reveal 0.0 5 0.0 0 0.00 0.0 0 0.00 CDF and 0.010 0.0 0 0.00 0.0 0 0.00 PDF on φ 0.015 0.0 0 0.00 0.0 0 0.00 0.020 0.0 0 0.00 0.0 0 0.00 0.025 0.0 0 0.00 0.0 0 0.00 0.030 0.0 0 0.00 0.0 0 0.00 0.035 0.0 0 0.00 0.0 0 0.00 {H | &} 0.700 0.040 0.0 0 0.00 0.0 0 0.00 {HH | &} 0.497 0.045 0.0 0 0.00 0.0 0 0.00 {TT | &} 0.092 0.050 0.0 0 0.00 0.0 0 0.00 0.05 0.0 0 0.00 0.0 0 0.00 0.060 0.0 0 0.00 0.0 0 0.00 0.065 0.0 0 0.00 0.0 0 0.00 0.070 0.0 0 0.00 0.0 0 0.00 0.075 0.0 0 0.00 0.0 0 0.00 0.080 0.0 0 0.00 0.0 0 0.00 0.085 0.0 0 0.00 0.0 0 0.00 0.090 0.0 0 0.00 0.0 0 0.00 0.095 0.0 0 0.00 0.0 0 0.00 0.10 0.0 0 0.00 0.0 0 0.00 0.105 0.0 0 0.00 0.0 0 0.00 0.1 0 0.0 0 0.00 0.0 0 0.00 0.1 5 0.0 0 0.00 0.0 0 0.00 0.120 0.0 0 0.00 0.0 0 0.00 0.125 0.0 0 0.00 0.0 0 0.00 0.130 0.0 0 0.00 0.0 0 0.00 0.135 0.0 0 0.00 0.0 0 0.00 0.140 0.0 0 0.00 0.0 0 0.00 0.145 0.0 0 0.00 0.0 0 0.00 0.150 0.0 0 0.00 0.0 0 0.00 0.15 0.0 0 0.00 0.0 0 0.00 0.160 0.0 0 0.00 0.0 0 0.00 0.165 0.0 0 0.00 0.0 0 0.00 0.170 0.0 0 0.00 0.0 0 0.00 0.175 0.0 0 0.00 0.0 0 0.00 0.180 0.0 0 0.00 0.0 0 0.00 0.185 0.0 0 0.00 0.0 0 0.00 0.190 0.0 0 0.00 0.0 0 0.00 0.195 0.0 0 0.00 0.0 0 0.00 0.20 0.0 0 0.00 0.0 0 0.00 0.205 0.0 0 0.00 0.0 0 0.00 PDF(φ) 0.0 0 1.0 0 2.0 0 3.0 0 4.0 0 5.0 0 6.0 0 7.0 0 8.0 0 0.0 0 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 1.0 0 C denotes the highest competitive bid. - -> The proba density on C is assumed to be Beta, with the fol owing parameters: Unfold to \$0.0 0.000 0.000 reveal \$0.5 0.000 0.000 CDF and \$1.0 0.000 0.000 r n PDF on C \$1.5 0.000 0.000 18 35 \$2.0 0.000 0.000 \$2.5 0.000 0.000 \$3.0 0.000 0.000 \$3.5 0.000 0.000 \$4.0 0.000 0.000 \$4.5 0.000 0.000 \$5.0 0.000 0.000 \$5.5 0.000 0.000 \$6.0 0.000 0.000 \$6.5 0.000 0.000 \$7.0 0.000 0.000 \$7.5 0.000 0.000 \$8.0 0.000 0.000 \$8.5 0.000 0.000 \$9.0 0.000 0.000 \$9.5 0.000 0.000 \$10.0 0.000 0.000 \$10.5 0.000 0.000 \$11.0 0.000 0.000 \$11.5 0.000 0.000 \$12.0 0.000 0.000 \$12.5 0.000 0.000 \$13.0 0.000 0.000 \$13.5 0.000 0.000 \$14.0 0.000 0.000 \$14.5 0.000 0.000 \$15.0 0.000 0.000 \$15.5 0.000 0.000 \$16.0 0.000 0.000 \$16.5 0.000 0.000 \$17.0 0.000 0.000 \$17.5 0.000 0.000 \$18.0 0.000 0.000 \$18.5 0.000 0.000 \$19.0 0.000 0.000 \$19.5 0.000 0.000 \$20.0 0.000 0.000 \$20.5 0.000 0.000 PDF(C) 0.000 0.005 0.010 0.015 0.020 0.025 0.030 0.035 0.040 0.045 0.050 \$0.0 \$10.0 \$20.0 \$30.0 \$40.0 \$50.0 \$60.0 \$70.0 \$80.0 \$90.0 \$100.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### Page1 / 56

Problem_Session_10_Review - MS&E 352 Decision Analysis II...

This preview shows document pages 1 - 10. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online