Answered Same Day May 08, 2022

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Dr Shweta answered on May 09 2022

89 Votes

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Ans a)
Given that there are two types of buyers: each player belongs to type space {H, L}
Strategy of each player = (a, b)
Player 1 (Type H) -valuation vH =
Player 2 (Type L) -valuation vL =a
0 < a
and 2a>
Possible payoffs:
1. If L bids a, H bids a: L gains a=a/2 H gains b=a/2
2. If L bids a, H bids b: L gains 0, H gains b=a+
2
All Nash equili
ium points in pure strategies for this auction are as follows:
Nash equili
ium is an action profile for all players in an...

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