I'm trying to find the correct formula to calculate de expected revenue of a reverse auction, properly, a second-price sealed-bid procurement auction to identify the lowest cost supplier.
Prices are private, independent, and uniformly distributed between 50 to 100. no bidder will go below 50. And the number of bidders are 10
We know that it does not matter whether we use a first-price or a second price auction - the expected final price is the same.
The formula E(p)=(n-1)/(n+1) stems from the fact that it is the valuation of the (n-1)th bidder that determines the expected price.
Now, this is a reverse auction, so the expected price stems from the ordering of bids. In a reverse auction, the price is not dependent on the value of the (n-1)th bidder, but on the second bidder. So we get that instead, E(p)=2/(n+1).