A Seller Knows That There Are Two Bidders for the Object

question 9

Multiple Choice

A seller knows that there are two bidders for the object she is selling. She believes that with probability , one has a buyer value of $5 and the other has a buyer value of $10 and, with probability , one has a buyer value of $8 and the other has a buyer value of $15. She knows that bidders will want to buy the object so long as they can get it for their buyer value or less. She sells it in an English auction with a reserve price which she must set before the auction starts. To maximize her expected profits, she should set the reserve price at

• A) $5.A7B7
• B) $10.
• C) $8.
• D) $13.
• E) $15.

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Definitions:

External Events

Occurrences outside an organization that can impact its operations, strategies, and success, often unpredictably.

Basic Beliefs

Foundational principles or convictions that are accepted as true by an individual or group, shaping attitudes and behavior.

Antecedent

An event, condition, or cause that happens before another event and influences it.

Stimulus

Any event, object, or signal that triggers a response or reaction from an organism or system.