A Seller Decides to Sell an Object by Means of an English

question 35

Multiple Choice

A seller decides to sell an object by means of an English 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)$300
• B)$360
• C)$400
• D)$600
• E)$200

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Definitions:

Rationalization

A coping technique where disputable actions or emotions are rationalized in an apparently logical way to evade the actual reason behind them.

Financial Aid

Any form of funding that assists students in paying for their education, typically coming from various sources such as scholarships, grants, and loans.

Defense Mechanism

Mental tactics employed subconsciously to shield an individual from the distress caused by thoughts or emotions that are not acceptable.

Repression

A defense mechanism where uncomfortable thoughts or memories are unconsciously blocked from conscious awareness.