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zvonat [6]
3 years ago
13

Now let's suppose that there are three bidders who have independent, private values vi which are either 1 or 3. for each bidder,

the probabilities of 1 and 3 are both 1/2. what is the seller's expected revenue in this case?
Mathematics
1 answer:
vodomira [7]3 years ago
4 0
Expected value, 
E[X] = \sum p_i*x_i = (1/2)*1 + (1/2)*3 = 0.5+1.5 = 2
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