Information content of a random variable Random variable x Outcome of a random experiment Discrete R V takes on values from a finite set of possible outcomes PMF: P(X=y)=Py) How much information is contained in the event X=y? Will the sun rise today Revealing the outcome of this experiment provides no information Will the Celtics win the NBa championship? Since this is unlikely, revealing yes provides more information than revealing Events that are less likely contain more information than likely events
Marciano Siniscalchi October 28, 1999 Introduction [Again, by and large, I will follow OR, Chap. 8, so will keep these notes to a minimum.] Review of key definitions Recall our three payoff aggregation criteria: discounting, i.e
These notes essentially tie up a few loose ends in Lecture 8; in particular, I exhibit examples of inefficiencies in first- and second-price auctions. I would also like to briefly comment on Questions 1 and 2 in Problem Set 2
