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Two players compete in a first-price sealed bid auction. Each player's valuation is vi = (1/3) + i, where i is known only to player

Two players compete in a first-price sealed bid auction. Each player's valuation is vi = (1/3) + i, where i is known only to player i, but is drawn from a uniform distribution over [0,1]. Suppose Player 2 sets a bid at b2 = (1/3) + (1/2)2. Solve for Player 1's optimal bid (b1) that maximizes their expected payoff, as a function of 1. Show all work.

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