- #31
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Yes we should. I got lazy.etotheipi said:
Expected Value: Bidding for a House
- Thread starter Master1022
- Start date
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- Tags
- Expected value Value
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Homework Help Overview
The problem involves determining an optimal bidding strategy for a house whose price is uniformly distributed between 0 and 1000. The original poster explores the implications of bidding higher than the house's value, considering the potential profit from reselling the house at a guaranteed price of ## nV ##, where ## n ## is a multiplier and ## V ## is the house's value.
Discussion Character
- Exploratory, Mathematical reasoning, Assumption checking
Approaches and Questions Raised
- The original poster attempts to calculate expected profit based on the bid and the house's value, questioning how to represent this mathematically. Some participants suggest evaluating specific cases, while others discuss marginalizing over the house's value to derive expected profit as a function of the bid.
Discussion Status
Participants are actively engaging with the mathematical formulation of the problem, exploring different scenarios and questioning the validity of assumptions. There is a recognition of the need to consider probabilities associated with winning or losing the auction, and some participants express uncertainty about the implications of their calculations.
Contextual Notes
Participants note that the expected value calculations depend on the uniform distribution of the house's value and the chosen bid. There is ongoing discussion about the implications of different values for ## n ## and the potential outcomes based on various bidding strategies.
- #32
etotheipi
I can hardly complain; I think one tiny bit of laziness is quite excused, given the rest of your excellent analysis and work on Excel 
. Thanks for taking the time to clarify! 
. Thanks for taking the time to clarify!