Differentiating F π, r, p, pi, p2 with respect to its elements
We differentiate F π, r, p, pi, p2 with respect to its elements π, r, a, p1, and p2.
— = v2-a-p2- v2-va-p2 - v1 - p1 1 + r /r
δπ
(A3) = v2-a-p2-v2-va-p2-v vi-pi - v2+a-p2 - vi-pi Ir,
= -2a + vɪ - p1 - v2 + a - p2 / r < 0
(A4) —= ∖-π v1-p1- v2-va-p2 ∕r2<0,
δr
— = -π+ ∖-π 1 -vr Ir= l-π + r(l-2π) Ir
(A5) δa
---= π-v ∖-π 1 + r Ir= ∖-π-vr ∕r>0
(A6) δpl
---= -π- ∖-π 1 + r lr = - ∖-π-Vr ∕r<0
(A7) δp2
Conditions that give an optimal bid that equals the expected consumption value in an
auction for a new experience good
It is straightforward to show that ifv1-p1=v2-α-p2, v1-p1=v2 +a-p2, r = ∞, ττ = O,
π = 1, or a = 0, there would not be any information value associated with trying the new
brand in the auction, and the subgame perfect bidding strategy would be equal to the expected
consumption value.
First, if v1 - p1 - v2 - a - p2, we have that F > 0. This gives the following optimal bid from
equation (14):
More intriguing information
1. Ongoing Emergence: A Core Concept in Epigenetic Robotics2. On the Existence of the Moments of the Asymptotic Trace Statistic
3. The name is absent
4. Elicited bid functions in (a)symmetric first-price auctions
5. How Low Business Tax Rates Attract Multinational Headquarters: Municipality-Level Evidence from Germany
6. The name is absent
7. The Complexity Era in Economics
8. The name is absent
9. Investment and Interest Rate Policy in the Open Economy
10. Problems of operationalizing the concept of a cost-of-living index