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

question 31

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 $400 and a probability of 1/2 that the bidder's value is $100.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)$175
• B)$220
• C)$400
• D)$250
• E)$100

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Definitions:

Equity

Fair treatment and fairness in opportunity, distribution of resources, and recognition within an organization or society.

Social Responsibility

The obligation of individuals, groups, or organizations to act for the benefit of society at large, considering the impact of their activities.

High Status Persons

Individuals who hold a position of power, prestige, or high social standing within a group or society.

Communication

The process of exchanging information, ideas, thoughts, and feelings between people through speech, writing, visuals, or behavior.