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A product is worth v+12.4v+12.4 to the buyer but only vv to the seller. The seller can make a take-it-or- leave-it offer to the
A product is worth v+12.4v+12.4 to the buyer but only vv to the seller. The seller can make a take-it-or- leave-it offer to the buyer. Now the value vv is only known to the seller, but not the buyer. The buyer only knows that vv is uniformly distributed between 0 and 20. That is, any value between 0 and 20 is equally likely. What would be the highest vv that will be sold by the seller?
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Microeconomics
Authors: Douglas Bernheim, Michael Whinston
2nd edition
73375853, 978-0073375854
