Difference between oral auctions and second-price auctions

Reference no: EM132610954

Auctions can be an important tool for selling goods and gathering information. Auctions are used in multiple venues including agriculture, eBay, and distressed asset sales. The seller does not have to worry about estimating demand and setting a price because the demanders will do that through the auction process.

Write an essay examining the value of auctions in the economy by addressing the following items.

1. Explain the difference between oral auctions and second-price auctions, including how they work and their results.

2. Use the expected value information to illustrate how having more bidders in an oral auction will likely result in a higher winning bid.

3. Explain how the number of bidders in a common value auction affects the outcome of the auction. Relate this to the effect on price in different market structures based on the number of producers.

4. Auctions lead to outcomes where buyers reveal their value for the products being auctioned. To successfully price discriminate, firms often rely on buyers revealing their value for products. Explain the conditions necessary for firms to be able to price discriminate.

Reference no: EM132610954

Questions Cloud

What is the problem with specialization according to smith : What is the problem with 'specialization' according to Smith? What was Smith's solution? According to Smith, how can we reform capitalism?

Decrease childhood obesity in city : Childhood obesity rates have been steadily increasing and would like you to develop programs to help decrease childhood obesity in the city

What aspects of aztec life : With their belief in a pantheon of deities, how might an Aztec have reacted upon visiting a Christian house of worship such as Chartres Cathedral?

Explain what a Key Audit Matter is : Explain what a 'Key Audit Matter' is and under what circumstances it should be included in the auditor's report

Difference between oral auctions and second-price auctions : Explain the difference between oral auctions and second-price auctions, including how they work and their results.

Exist between the npv and the irr : Is it possible for conflicts to exist between the NPV and the IRR when independent projects are being evaluated? Explain your answer.

The parasympathetic nervous system : The parasympathetic nervous system is what makes us salivate when we think of food,

What is moral and what is legal : What is moral and what is legal. What, exactly, is the connection between the law and morality? Is everything that is legal morally acceptable?

Describe hr ethical issues multinational corporations face : Examine two (2) of the major HR ethical issues multinational corporations face when operating globally. Recommend two (2) preventative actions that HR.

User Account

All Pages