Difficulty: Hard
Category: Game Theory & Logic
Practice quant interview questions from top firms including Jane Street, Citadel, Two Sigma, DE Shaw, and other leading quantitative finance companies.
Topics: game-theory, mechanism-design, revelation-principle, information-elicitation
Consider a scenario where a large hedge fund wants to acquire a significant stake in a publicly traded company. The fund believes the company is undervalued, but acquiring a large stake could drive up the price. The fund employs a mechanism to elicit information from various brokers about their willingness to sell shares at different prices. The fund's goal is to design a mechanism that maximizes its expected profit while ensuring the brokers truthfully reveal their selling prices. Which of the
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