H5.

4. Consider the following variant of the bilateral trading game. The buyer and seller submit bids p, and ps, respectively. There are two prices p, and p2 such that p2 > p1 > 0. If the buyer's bid is at least as much as or above p2, and seller's bid is at most or below p1, then the trading takes place. Otherwise the object is not traded. If the trade takes place, the buyer pays p2 and the seller receives p1. Assume buyer and seller's private value v and cost c are identically and independently distributed in [0, 1]. Is there a dominant strategy for the buyer and seller in this game? If yes, then prove that the strategy is (weakly / strictly) dominant. If not, then give an example