64 634
Assignments Done
99,1%
Successfully Done
In September 2018

Answer to Question #63682 in Microeconomics for boset

Question #63682
Suppose that there are n bidders whose valuations vis are drawn independently and identically from the distribution F over [0, ω]. Describe and derive the symmetric , monotonic equilibrium in the first price auction. Derive an expression for the expected payment by a bidder.
Expert's answer
A symmetric equilibrium is an equilibrium where all players use the same strategy (possibly mixed) in the equilibrium. In the Prisoner's Dilemma game where is the only Nash equilibrium, both players use the same strategy and the equilibrium is symmetric.
Given no externalities all mixed-strategy equilibria in the auctions must be ex post­ allocation and interim expected payment-equivalent to some monotone pure strategy equilibrium.
For a bidder i with value vi expected payment should be:
E[maxvj(j≠i)∣vj≤vi,j≠i]
Pr(vj≤vi,j≠i)

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be first!

Leave a comment

Ask Your question

Submit
Privacy policy Terms and Conditions