econ

The U.S. government is auctioning the mining rights to a deposit of copper ore on federal land. The net economic value of the copper ore is $100 million but this fact is not known to anyone. The government will auction the mining rights via a second-price. sealed bid auction. Suppose that each firm has an estimate of the value of winning the mining rights. Firm Estimate (millions of $) 1 80 2 120 3 95 4 115 5 90 Suppose that each firm ignores the possibility that they could have misestimated the value of the mining rights (e.g., Firm 1 assumes that there is no chance that the actual value would be different from $80 million). 03.2 1 Point What would be the winning rm's surplus from the auction? Enter your answer as an integer. Enter your answer here Save Answer 03.3 1 Point If bidders don't properly account for the winner's curse in an auction for an item that has uncertain value to bidders, why can it actually be a bad thing to win the auction? Enter your answer here