4 ms·
In the first link, memory-less case, the seller’s expected profit should be 0.25, not 0.5: he sells its product for 0.5 half of the times.
by occamrazor 8y ago
In the first link, memory-less case, the seller’s expected profit should be 0.25, not 0.5: he sells its product for 0.5 half of the times.
- Majromax 8y agoBoth the seller's expected profit and the buyer's surplus are summed over two periods. The buyer has an expected surplus of 0.25 when the sale is made, but the sale is only made 50% of the time.