Appendix:
If Two Art Dealers Bidding for a Picasso Receive $\quad$

question 39

Essay

Appendix:
If two art dealers bidding for a Picasso receive the following forecast information about the chance of a forgery which with previously unknown Picasso paintings is present 8 times in 10 historically,what is the amount by which strategic underbidding could be reduced if ten bidders were attracted to the auction?
​
​ Forecast Received: $\quad$ Not a forgery, Actual Ficasso is Forecast
Forecast Accuracy: $\quad$ Prob(This Forecast/Actual Forgery) $= 0.4$
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Prob(Forgery Forecast/Actual Forgery) $= 0.6$
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Prob(This Forecast/Actual Ficasso $) = 0.9$
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Prob(Forgery Forecast Actual Ficasso $) = 0.1$

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Definitions:

Hepatic Duct

The duct that conveys bile from the liver and gallbladder to the duodenum.

Gallbladder

A small, pear-shaped organ located under the liver that stores and concentrates bile, a fluid produced by the liver to aid in the digestion of fats.

Pancreatic Islets

Clusters of cells in the pancreas that regulate blood sugar levels, notably by producing insulin and glucagon.

Sinusoids

Specialized blood vessels that are found in certain organs, like the liver and spleen, facilitating the exchange of blood cells, nutrients, and waste.