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what is the solution of all the parts? 1. Bilateral Monopoly with Asymmetric Information Consider the Dynamic View of the rm: Investments are made in

what is the solution of all the parts?

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1. Bilateral Monopoly with Asymmetric Information Consider the Dynamic View of the rm: Investments are made in Stage 1, and Buyer and Seller are thus locked in a bilateral monopoly. In Stage 2, B has a valuation v of the good, S has a cost c of producing the good; so the surplus/pie is s = v c. Suppose that S knows both 1; and c, but B knows only 1;. v c B yes no S yes yes B presumes that c is either c1 or c2 with half probability each. Let 0

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