A Seller Decides to Sell an Object by Means of a Sealed-Bid

question 13

Multiple Choice

A seller decides to sell an object by means of a sealed-bid second-price auction without a reservation price.There are two bidders.The seller believes that for each of the two bidders there is a probability of 1/2 that the bidder's value for the object is $600 and a probability of 1/2 that the bidder's value is $200.The seller believes that these probabilities are independent between bidders.If the bidders bid rationally, what is the seller's expected revenue from the auction?

• A)$600
• B)$400
• C)$300
• D)$280
• E)$360

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Definitions:

Widowed

The state or condition of having lost one's spouse through death, which can significantly impact an individual's social and emotional well-being.

Finality of Death

The irreversible cessation of all biological functions that sustain a living organism.

Inability

The state of being unable to do something.

Communicate

To share or exchange information, thoughts, or messages through speech, writing, visual representations, or other modes.