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You have decided to hold a second-price auction with no reserve to sell a painting. There are currently 3 bidders who would participate in the
You have decided to hold a second-price auction with no reserve to sell a painting. There are currently 3 bidders who would participate in the auction. You can also hire a marketing firm, who can bring up to 20 additional bidders to the auction at a cost of $2 per bidder. The bidder's valuations (including the 3 initial bidders) are drawn independently and uniformly at random over the interval [0,$100]. How many additional bidders will you ask the marketing firm for? Answer this question assuming that your objective is maximizing profit maximizing the winner's surplus (i.e., her valuation for the good minus her payment). you need to consider the two cases (two bullets) separately. Try to get exact answers (a single number for each bullet). If you cannot do that, then describe how you can compute such an answer to get partial credit. *if that helps* you may use analytical tools to compute/plot expressions
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