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Consider a similar economy as in Question 1. Agent C can produce private information about the true realization x at t=1 at the cost =8.
Consider a similar economy as in Question 1. Agent C can produce private information about the true realization x at t=1 at the cost =8. Suppose lA=lB=A=B=1. Now x is uniformly distributed between [. ]. The probability density of x is () = 1 for [. ] and zero otherwise. The cumulative distribution function is () = for [. ]. For example, () = ( ) = means there is a probability of F(L) that x is smaller than L. On the other hand, ( ) = 1 () = 1 is the probability of x bigger than L. Suppose w=50 and x is uniformly distributed between a=0 and b=100. It means f(x)=1/100
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