Consider a third-price auction withn >3 bidders (the highest bidder wins but pays a price equal to the third-highest bid).

a. Assume that the equilibrium function is increasing in the bidders value. Intuitively try to reason out how the equilibrium bid(v) should relate tov. Is it equal tov, greater, or less?

b. Use the Revenue Equivalence Principle to find the equilibrium bidding function.