midterm - Professor Rod Garratt ECON 177 Midterm The exam...

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Professor Rod Garratt ECON 177 Midterm April 27, 2011 The exam is worth a total of 30 points. You have 1 hour and 15 minutes to complete this exam. Good Luck! In all the questions that follow you may assume each of the i=1,. ..,n bidders' values are drawn independently from the uniform distribution on [0,100]. 1. What is the probability that an individual’s value is less than 70? What is the probability that an individual’s value is between 20 and 40? (2 points) 2. Write down the distribution function for the highest of the n bidders’ value draws. (2 points) 3. Write down the distribution function for the second-highest of the n bidders’ value draws. Explain in words what each part of your expression represents. (3 points)
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4. Suppose that two risk neutral bidders participate in a first-price auction with no entry fee and no reserve. Write down the symmetric equilibrium bid function and verify that the bid function you wrote down is, in fact, an equilibrium bid function.
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This note was uploaded on 12/26/2011 for the course ECON 177 taught by Professor Garratt during the Fall '09 term at UCSB.

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midterm - Professor Rod Garratt ECON 177 Midterm The exam...

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