Examining the value of auctions in the economy

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Question: 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 4 questions based on the 3 peer review documents attached.

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.

Adhere to APA Style when writing your essay, including citations and references for sources used. Be sure to include an introduction. Please note that no abstract is needed.

Article 1 - Bidding Frenzy: Speed of CompetitorReaction and Willingness to Pay in Auctions

Article 2 - How Accurately Do Structural AsymmetricFirst-Price Auction Estimates Represent TrueValuations by Kirill Chernomaz1 and Hisayuki Yoshimoto

Article 3 - Competing first-price and second-price auctions by Joyce Delnoij and Kris De Jaegher

Attachment:- Project Requiremens Checklist.rar

Reference no: EM132917699

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