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Refer to the original settlement of the estate with heirs Al, Bev, and Cal. Below is a chart showing their original bids and the original
Refer to the "original settlement" of the estate with heirs Al, Bev, and Cal. Below is a chart showing their original bids and the original settlement. Note that there is a total of $30,000 cash in this estate.
Al Bev Cal Piano $1,800 $1,500 $1,650 Car 2,600 2,400 2,000 Boat 1,000 800 1,200 Cottage 12,000 13,000 10,000 Cash 30,000 30,000 30,000 Total of bids 47,400 47,700 44,850 Fair dollar share (1/3 of total of 15,800 15,900 14,950 bids) Object(s) received Car, Cottage Boat piano Value of object(s) 4,400 13,000 1,200 Money you owe/are owed (Fair 11,400 2,900 13,750 dollar share - value of objects) Share of surplus (1/3 each) 650 650 650 Final Settlement (object(s) Car, Cottage Boat and/or cash) piano and and and $3,550 $14,400 $12,050The method of sealed bids is subject to collusion among the participants, which can affect the nal settlement. In the example below, if Al and Bev compare their bids before submitting them, they might have the following conversation: Bev: I can raise my bid on the piano to $1,799 and still not outbid you. I really don't want the piano anyway. Al: But that might be suspicious. Why don't you change your bid to $1,750, and the $50 difference won't be so obvious. OLD BIDS Al Bev Cal Piano $1,800 $1,500 $1,650 Car 2,600 2,400 2,000 Boat 1,000 800 1,200 Cottage 12,000 13,000 10,000 Cash 30,000 30,000 30,000 NEW BIDS \\ 1A1 \\Bev \\Cai \\ 1 Piano 1 $1,300 1 $1,750 1 $1,650 1 Car 2,600 2,400 2,000 Boat 1,000 300 1,200 1 Cottage' 12,000 1 13,000 1 10,000 1 1 Cash 1 30,000 1 30,000 1 30,000 \\ Explain in a few complete sentences: Why would raising Bev's bid on the piano increase her nal settlementStep by Step Solution
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