Question
A one-sided asymmetric information first-price auction.Suppose bidder 1's valuation for a good is commonly known to be 1/2. On the other hand, bidder 2 knows
A one-sided asymmetric information first-price auction.Suppose bidder 1's valuation for a good is commonly known to be 1/2. On the other hand, bidder 2 knows his own valuation for the good, but bidder 1 believes that bidder 2's valuation is uniformly distributed in the interval [0, 1]. The two bidders are participating in a first-price auction. Each bids simultaneously for the good, and the highest bidder gets the good and pays her/his bid. The loser gets and pays nothing. Suppose that, if there is a tie, the tie is broken in favor of bidder 2.Prove there is no pure strategy BNE in this game.
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