First-Price Auction with Uniform Values
Two risk-neutral bidders have private values drawn independently and uniformly from [0, 1]. In a sealed-bid first-price auction (the winner pays their own bid), each bidder bids a fixed fraction of their value in the symmetric equilibrium. What fraction?
Related problems & prerequisites
Worth solving first
- Hawk-Dove 7.0/10
- The Prisoner's Dilemma 7.0/10
- Traveler's Dilemma 7.0/10
Source: Standard first-price sealed-bid auction result from the auction-theory literature founded by William Vickrey (1961). Statement written for AxiomIQ.