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Consider a procurement auction involving one buyer and two suppliers of an intermediate good. The buyer will pay $10M to the supplier who offers

Consider a procurement auction involving one buyer and two suppliers of an intermediate good. The buyer will pay $10M to the supplier who offers better quality. Quality is on a continuous scale of 1 to 10. For each supplier, the cost of delivering quality X is X million dollars (e.g. if the quality is 5, it costs the supplier $5M). If there is a tie (qualities are equal), then the buyer will split the contract between the two suppliers (each gets $5M, and their costs are X/2 million dollars). Let X1 denote Supplier 1's quality, and let X2 denote Supplier 2's quality. Which standard game form does this model fit best?

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Answer This procurement auction scenario fits best into the game form known as an allpay auction An allpay auction is a type of game where all partici... blur-text-image

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