Introduction to auctions

Question 1

What is an auction defined by

Answer 1

1. Bidding format: form of the bids
   they can be price only, multi-attribute, price and quantity or quantity only
2. Bidding process: Closing/timing rules, available information
3. Price and allocation rules:
   Final price and quantities,winning bidders

Question 2

What is an ascending auction

Answer 2

The price starts low and goes up

There at cases in those auctions

1.Only bidders announce prices: the winner is the highest bidder

2. Only the auctioneer announces prices: auctionner proposes a price bidders say if they accept or no. Price paid = last price announces by the auctioneer.

Question 3

What does the ascending auction implies

Answer 3

1. All bidders are participating at the same time
2. It may take some time to run the auction

Question 4

What is a First price sealed-bid auction

Answer 4

Winner pays her bid
the bidders submit a sealed bid
Highest bidder wins

Question 5

What is a Dutch auction

Answer 5

There is a price clock: displays a price starting from high price that is decreasing

The auction stops as soon as someone says “Mine!”

This is the winner and she pays the number on the clock

Question 6

What is a reserve price

Answer 6

Only bids above a certain amount are considered

Guarantee’s a revenue for the seller

Question 7

What is a second price sealed auction

Answer 7

The winner is the one with the highest bid but pays the 2nd highest bid

Question 8

What is an English auction

Answer 8

Auctioneer proposes a price, bidders either accept or no

ends when there’s only one bidder left

Question 9

Swoopo Auction

Answer 9

Price starts at 0 and its cost 0.5 cents to bid

bid until the clock runs down

when the clock runs out, highest bidder is the winner

EBAY

Question 10

How do you find equilibrium in FPA

Answer 10

n-1/n

Question 11

How do you fin dthe expected price in FPA

Answer 11

n-1/n+1 X max of interval