Originally posted by telerioncould you please explain your notation?
Ok this one requires only a bit more mathematics then the last two. It is a classic example, introducing a concept called "asymmetric information".
There are 2 players, P1 and P2.
P1 owns a business. The business is worth V to P1.
P2 is considering buying the business. P2 values the business at 1.5V (Maybe P2 is a shrewder entrepenuer and thu ...[text shortened]... will accept. If the offer is less than V, P1 will refuse.
What offer should P2 make to P1?
Originally posted by AcolyteUhm . . . yes. Yes I think we must go with that. I hesitate only because last time I let common knowledge out of her cage too early. This time though we must assume it from the start.
Does P2 know that P1 knows V? Does P1 know that, and so on ad infinitum?
Originally posted by fearlessleaderNow worries. V~U(0,1) is just notational form for "V is distributed as uniform on the interval [0,1]."
could you please explain your notation?
what does V~U(0,1) mean. keep in mind that i read your entire post and still couldn't figure it out.
Originally posted by The PlumberIf you have no idea what it means you should just leave this thread. It won't get any easier
Some of us don't understand what "distributed as uniform on the interval [0,1]" means.
Originally posted by telerionOops, misread the question.
You thinking along the correct lines. This is where you go astray just a bit.
Originally posted by Acolyte
[b]Suppose P1 offers to sell at price x.
But notice from the OP that P2 is the player making the offer to P1. Amend your reasoning with this in mind, and I'm sure you will have it in a snap. Good work by the way. [/b]