Game theory-tipping strategy
Problem: Using Game Theory to explain, would you be likely to tip differently at the café next to your office than you do at the one at which you stop on your summer vacation to Yellowstone?
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There is some uncertainty about the auction design that will be used, so you must suggest an optimal bidding strategy for the following auction designs:
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Q1. Consider a fair gamble (v) of winning or losing $1. For this gamble, what is E(v^2)? Q2. Now consider varying the gamble in part (a) by multiplying each prize by a positive constant, k. Let h = kv. What is the value of E(h^2)?
Using Game Theory to explain, would you be likely to tip differently at the café next to your office than you do at the one at which you stop on your summer vacation to Yellowstone?
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1. Formulate this problem using algebraic notation 2. Graph the feasible region and find the optimal solution
Please make sure the page have a reference page. Please include paraphrased citations and references for each paper. I do not allow direct quotes. If no minimum is listed, I would expect at least two sources from scholarly peer-reviewed journals (
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