2. Economics
3. you want to sell your old computer on ebay you...

# Question: you want to sell your old computer on ebay you...

###### Question details

You want to sell your old computer on E-Bay. You think that there may be as many as three bidders who would be interested in your machine. Although you are not sure how much they value your computer, you believe that each potential bidder may equally well value it at $50,$80, or $90. The bid increment is$1. Should you set a reservation price, and if so, what should it be? [Hint: Calculate the expected return without a reservation price, and then with different possible reservation prices. You might want to set this up on Excel.]