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Consider an independent private values sealed-bid second-price auction with n players. We saw in class that such an auction has a Nash equilibrium in which
Consider an independent private values sealed-bid second-price auction with n players. We saw in class that such an auction has a Nash equilibrium in which every player's bid is equal to her valuation. (a) Does it also have a Nash equilibrium in which one of the players, say player i, bids v (the highest possible valuation) regardless of her valuation and all other players bid v (the lowest possible valuation) regardless of their valuations? (b) Is the outcome of the strategy profile described in part a efficient?
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