Potential buyers compete for good by submitting bids

Assignment Help Business Economics

Reference no: EM13859828

In an auction, potential buyers compete for a good by submitting bids. Adam Galinsky, a social psychologist at Northwestern University, compared eBay auctions in which the same good was sold. He found that, on average, the larger the number of bidders, the higher the sales price. For example, in two auctions of identical iPods, the one with the larger number of bidders brought a higher selling price. According to Galinsky, this explains why smart sellers on eBay set absurdly low opening prices (the lowest price that the seller will accept), such as 1 cent for a new iPod. Use the concepts of consumer and producer surplus to explain Galinsky’s reasoning.

Reference no: EM13859828

Questions Cloud

Bank evaluation process : Assume that you are nearing graduation and have applied for a job with a local bank. The bank's evaluation process requires you to take an examination that covers several financial analysis techniques.

Determining target market and positioning of your product : Prepare a 350- to 700-word summary with a focus on determining the target market and positioning of your product or service

What the term spontaneous order means : What are the advantages of E-Commerce? Name all the specific cyber issues that have necessitated new laws? Explain what the term “spontaneous order” means? Name all of the factors that, according to Lawrence Lessig, govern both real space and cybersp..

New agreement with movie producers stipulating : Hollywood screenwriters negotiate a new agreement with movie producers stipulating that they will receive 10% of the revenue from every video rental of a movie they authored. They have no such agreement for movies shown on on-demand television. When ..

Potential buyers compete for good by submitting bids : In an auction, potential buyers compete for a good by submitting bids. Adam Galinsky, a social psychologist at Northwestern University, compared eBay auctions in which the same good was sold. He found that, on average, the larger the number of bidder..

Money according to the portfolio theories of money?demand : Explain how the following events will affect the demand for money according to the portfolio theories of money? demand: The economy experiences a business cycle contraction. Brokerage fees rise?, making bond transactions more expensive. Explain how t..

Calculate the initial and final vertical total stress : Calculate the initial and final vertical total stress, pore water pressure and vertical effective stress, at the mid-depth of the clay layer, (a) beneath the office block; and (b) beneath the car park

Guiding principles of sustainability : Using economic analysis and the guiding principles of sustainability, between the farmer subsidy solution and the principles of sustainability solution, justify which solution is best? Why?

Planning to retire : Sam Musso is planning to retire in 20 years. He can deposit money at 8% compounded quarterly. What deposit must he make at the end of each quarter until he retires so that he can make a withdrawal of $45,000 semiannually over five years after his ret..

User Account

All Pages