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Problem 279 of 333MediumProbabilityP279
Revenue from a second-price auction
Five bidders have private values drawn i.i.d. Uniform(0, 100) dollars. In a second-price auction each bids their true value, the highest bidder wins, and the winner pays the second-highest bid. What is the seller's expected revenue? What is the winner's expected surplus (value minus price)?
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