Define bidder i expected profit function

Reference no: EM13334527

Suppose that there are n bidders participating in a First Price Auction. Each bid- der's private valuation is independently drawn from the interval [0, 1] according to the distribution with cdf F(x) = x2 and pdf f(x) = 2x.
(a) Define bidder i's expected profit function. (You may assume that all of the other bidders bid a fraction of their valuations: bj = θvj.)
(b) Find the profit-maximizing condition for bidder i's bid by taking the derivative of this profit function you defined in part (a) and setting this equation equal to zero.
(c) What is the symmetric Bayesian Nash equilibrium in this auction?

Reference no: EM13334527

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