Suppose there is the following oral auction with two bidders.What is the expected revenue of the auction? $$\begin{array} { l l l }
\text { Bidder 1 } & \text { Bidder } 2 & \text { Prabability } \
\hline 10 & \$ 10 & .25 \
\$ 10 & \$ 15 & .25 \
\$ 15 & \$ 10 & .25 \
\hline 15 & \$ 15 & .25
\end{array}$$

Question

Suppose there is the following oral auction with two bidders.What is the expected revenue of the auction? $$\begin{array} { l l l } 
\text { Bidder 1 } & \text { Bidder } 2 & \text { Prabability } \
\hline 10 & \$ 10 & .25 \
\$ 10 & \$ 15 & .25 \
\$ 15 & \$ 10 & .25 \
\hline 15 & \$ 15 & .25
\end{array}$$

Quizplus · Accepted Answer

The expected revenue is the sum of the products of the bids and their probabilities. So, the expected revenue is:(10 * .25) + (10 * .25) + (15 * .25) + (15 * .25) = $11.25

Suppose There Is the Following Oral Auction with Two Bidders