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Question 4 Consider allocating an object to one of two players when each player's pref- erences are her private information. Player 1's value for the
Question 4 Consider allocating an object to one of two players when each player's pref- erences are her private information. Player 1's value for the object, denoted by U1 is drawn from a continuous distribution with [1, 2] as its support. Player 2's value for the object, denoted by '02, is likewise drawn from the interval [0,1]. 1. What is the equilibrium in dominant strategies if a second price auction is used to allocate the object. Is the outcome expost eicient'? 2. For what pairs (v1, '02) should Player 1 and Player 2 respectively be allocated the obiect in a mechanism that maximizes expected revenue for the seller? 3. Comment on the differing allocations you obtained in the previous two parts
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