lecture12 - Game Theory Mike Shor Lecture 12"Everything is...

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Game Theory “Everything is worth what its purchaser will pay for it.” - Publilius Syrus (Maxim 847, 42 B.C.) Mike    Shor Lecture 12
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Sources of Uncertainty Private Value Auction Difficult to lose money Do not bid more than your value (or less than your cost) Common Value Auction The item has a single though unknown value Bidders differ in their estimates The winner might be wrong! Mike Shor 2
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Common Value Auctions Example: Offshore oil leases Value of oil is roughly the same for every participant No bidder knows value for sure Each bidder has some information Auction formats are not equivalent Oral auctions provide information Sealed-bid auctions do not Mike Shor 3
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Mike Shor 4 10 tracts for sale 1 2 3 4 5 6 7 8 9 10 each with four bidders Bidder 1 Bidder 2 Bidder 3 Bidder 4
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This note was uploaded on 03/04/2012 for the course MGT 425 taught by Professor Shor during the Spring '11 term at Vanderbilt.

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lecture12 - Game Theory Mike Shor Lecture 12"Everything is...

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