Assume there are two buyers in an auction who have a common value.

Assume the buyers receive signals that are independently uniformly distributed on [0,1], and assume the value is the sum of the signals. Each buyer knows her own signal but does not know the signal of the other buyer. Assume the auction is conducted as a second-price auction. Showthat it is an equilibrium for each buyer to bid twice her signal. Compute the expected revenue for the seller and compare it to the expected revenue from the first-price auction solved as an example in Section 24.4.