What is the best reply of bidder one in an allpay auction


Problem

Consider an auction with two bidders and valuations which are distributed independently and uniformly over the interval [0, 1]. Bidder 1 knows that bidder 2 uses the bidding function b2(x2) = sqrt(x2).

What is the best reply of bidder 1 in an allpay auction?

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Microeconomics: What is the best reply of bidder one in an allpay auction
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