70.3k views
3 votes
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?

User Jerell
by
7.4k points

1 Answer

1 vote
Expected value,
E[X] =
\sum p_i*x_i = (1/2)*1 + (1/2)*3 = 0.5+1.5 = 2
User Nigam Patro
by
8.3k points