Unformatted text preview: What is the symmetric and increasing bidding equilibrium? What is the seller&s expected revenue? 2. An object is for sale via the standard 2nd-price sealed-bid auction. To encourage participation, the auctioneer o/ers subsidy to every bidder that submits a bid ± He will get a subsidy of the average of his opponents&bids. That is, every bidder submits his bid in a sealed envelop. The one who bids the highest price wins ± he gets the object and pays the second highest price. Furthermore, every bidder, regardless of winning, gets a subsidy of the average of his opponents&bids. What will be the outcome of the auction? Justify your answer. 1...
View Full Document
- Spring '11
- Economics, Auction, 2nd-price sealed-bid auction