Who would win and what would the winning price be

Reference no: EM13184758

You are considering auctioning a Leonardo Da Vinci original sketch. You entice four bidders to come to your auction. The bidders' valuations of the sketch in decreasing order are $3.0, $2.2, $2.0, and $1.5 (in millions).

• If you used a second-price sealed bid auction, who would win and what would the winning price be?

• If you used a first-price sealed bid auction and the optimal strategy for the participants was to shade their bid by 20% and the participants used this strategy, who would win and what would the winning price be?

• Which auction should you choose to maximize your profit? The first-price bidders shade their bids by 20% of their evaluation of its value. The second-price bidders all utilize the optimal strategy for second price auctions stated in the textbook.

Answer the above questions if the valuations of the sketch are $3.0, $2.2, $2.0 and $1.5.

Reference no: EM13184758

Questions Cloud

Calculate the current value of the index : An investor bought a tax-free provincial bond, at a cost of $1000 which will pay $50 interest each year for 20 years. The bond will mature in 20 years and return the original $1000. If there is a 2% annual inflation during this period, what real r..

Determine theexpected economic profit per unit : Owen runs a delivery business and currently employs three drivers. He owns three vans that employees use to make deliveries, but he is considering hiring a fourth driver. If he hires a fourth driver, he can schedule breaks and lunch hours so all thre..

Who would win and what would the winning price be : Which auction should you choose to maximize your profit? The first-price bidders shade their bids by 20% of their evaluation of its value. The second-price bidders all utilize the optimal strategy for second price auctions stated in the textbook.

What is the market value of the old equipment : Online Educators (OE), a not-for-profit firm exempt from taxes, is considering replacement of some electronic equipment associated with its distance learning (DL) facility. They spent $100,000 on the equipment 3 years ago and have depreciated it t..

What would be the present worth of her gifts : Autie Frannie wants to help pay for her twin nephews to attend a private school. She intends to send a cheque for $2,000 at the end of each of the next eight years to apply to the cost of schooling. a) If general price inflation, as well as tuiti..

State the accumulation of lactic acid : The ache or "burn" you feel in your muscle during strenuous exercise is caused by the accumulation of lactic acid. The hydrogen atom of the COOH group is acidic

Calculate net profit ratio and gross profit ratio : With reference to each one of the five ratios in turn and the other information provided explain what the results of your calculations indicate for Globe Ltd's going concern - What other audit techniques could the auditor use to indicate whether Gl..

User Account

All Pages