Question
Game theory: Give a mixed-strategy Bayesian Nash Equilibrium for a first-price sealed-bid auction with a discrete number of types instead of a continuum, but now
Game theory: Give a mixed-strategy Bayesian Nash Equilibrium for a first-price sealed-bid auction with a discrete number of types instead of a continuum, but now with n 2 players. Consider that the only possible two types are and , with < . The valuations are independent. Denote by p and p the probability that the type equals and , respectively. Assume that the seller's reservation price or minimum bid is lower than . Assume for your mixed- strategy Bayesian Nash Equilibrium that type bids and type randomizes according to the continuous distribution F(s) on [s,s]. Which should be the values of s and s in such a mixed-strategy Bayesian Nash Equilibrium?
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