varian auction design mechanism

[cx]

hi

so taking the case where english auctn with reserve price and profit maximizing case!

book say ther r 2 guys with 2 values 10,100

4 probable outcomes 10,10 10,100 100, 10 100,100?

so what i am unable to understand is that why is the winning strategy (10, 11, 11, 100) 10 and 100 cases r fine as they will flip the cases! but 11 i dont understand! plz help

and also is this auctns stuff imp fr dse or going ahead in micro as glazing thru the book, vicrkrey seems to be used ahead too, but is it imp for dse!

[cx]

hello amit

help!!!!!!!!!

[anonymouse]

The winning bids are (10, 11, 11, 100) because when the bidders have valuations (10, 100) or (100, 10), the bidder with the value 10 will not bid beyond 10.
The other bidder who has the value 100 will bid 11 next (the bid increment is 1) and will win the auction at this point.

I don't understand what you mean what you mean by flipping the cases, but my understanding is that the winning bid is 10 for the first case because no bidder will bid beyond 10, and 100 for the last case because both will bid up to 100.

Anyway, I don't think that auction theory is terribly important for DSE, but I'm not too sure. I guess it can't hurt to go over it if you have the time.

[cx]

sorry it was flip the coin on 10,100!lol

tks

so if we have a bid of (10,100) or (100,10), isnt it clear that guy with bid of 100 will win the bid. increment come when there is a tie. and in English auction seller will sell to a high price rather low price!

but as the guys ans is 10,11,11,100 which means there was bidding in both the cases! but why?

i think it has some ties with monopoly and stuff so its k to go over this too! but what is tell us is only vickrey!