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 that the bidder's value for the object is $400 and a probability of 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?

Question

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  that the bidder's value for the object is $400 and a probability of  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?

Quizplus · Accepted Answer

The Answer of 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  that the bidder's value for the object is $400 and a probability of  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 Seller Decides to Sell an Object by Means of an English