Assignment: Auction
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. Describe the value of auctions in the economy by addressing the following items.
a. Explain the difference between oral auctions and second-price auctions, including how they work and their results.
b. Use the expected value information to illustrate how having more bidders in an oral auction will likely result in a higher winning bid.
c. 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.
d. 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.
Must be at least three pages in length (not counting the title and references pages) and include at least three peer-reviewed resources.
Additional Details
Response reflects indepth consideration and personalization of the theories, concepts, and/or strategies presented. Viewpoints and interpretations are insightful. Response demonstrates synthesis of ideas presented.
Format your assignment according to the give formatting requirements:
a. The answer must be double spaced, typed, using Times New Roman font (size 12), with one-inch margins on all sides.
b. The response also includes a cover page containing the title of the assignment, the course title, the student's name, and the date. The cover page is not included in the required page length.
c. Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.