Question 1

​In a common-value setting

Accepted Answer

A) ​Oral auctions tend to return higher prices 
B) Sealed bid auctions tend to return higher prices 
C) Vickery auctions tend to return higher prices 
D) ​Rotating bid auctions tend to return higher prices 
A) ​Oral auctions tend to return higher prices 
B) Sealed bid auctions tend to return higher prices 
C) Vickery auctions tend to return higher prices 
D) ​Rotating bid auctions tend to return higher prices A

Question 2

​A second-price auction

Accepted Answer

A) ​is also called a Vickrey auction 
B) is where bidders submit increasing bids until all but one remains 
C) is where the sole remaining bidder wins and pays his winning bid 
D) ​all of the above 
A) ​is also called a Vickrey auction 
B) is where bidders submit increasing bids until all but one remains 
C) is where the sole remaining bidder wins and pays his winning bid 
D) ​all of the above A

Question 3

​Bid-rigging is less likely in

Accepted Answer

A) ​oral auctions 
B) English auctions 
C) first-price sealed-bid auctions 
D) ​all are equally likely 
A) ​oral auctions 
B) English auctions 
C) first-price sealed-bid auctions 
D) ​all are equally likely C

Question 4

Anna's Antiques expects to get three bidders for the unique china teacup it sells.Each of the bidders can either have a high-value of $100 or a low-value of $70 with equal probability .If three bidders show up at the auction,and two of the bidders are high-value,what would the winning price be?

Accepted Answer

A) ​Just above $100 
B) $100 
C) Just above $70 
D) ​$70 
A) ​Just above $100 
B) $100 
C) Just above $70 
D) ​$70

Question 5

​In common value auctions

Accepted Answer

A) ​Every bidder know the value of the object being sold 
B) Each bidder makes the same estimate of the value of the good 
C) Bidders do not know the estimates of the others 
D) ​The true value of the item differs across bidders 
A) ​Every bidder know the value of the object being sold 
B) Each bidder makes the same estimate of the value of the good 
C) Bidders do not know the estimates of the others 
D) ​The true value of the item differs across bidders

Question 6

In a common-value auction​

Accepted Answer

A) ​Every bidder knows the exact value of the item being auctioned 
B) Each bidder knows everyone else's value of the item 
C) The value of the item is different for all the bidders 
D) ​None of the above 
A) ​Every bidder knows the exact value of the item being auctioned 
B) Each bidder knows everyone else's value of the item 
C) The value of the item is different for all the bidders 
D) ​None of the above

Question 7

​The optimal bidding strategy for a second-price auction is

Accepted Answer

A) ​To bid your true value 
B) To shade your bid well below your true value 
C) To shade your bid just a little below your true value 
D) ​To size up your competition to determine how much to shade your bid 
A) ​To bid your true value 
B) To shade your bid well below your true value 
C) To shade your bid just a little below your true value 
D) ​To size up your competition to determine how much to shade your bid

Question 8

​Releasing more information,in a common-value auction is

Accepted Answer

A) ​Good for the bidders because it reduces the risk that they face 
B) Good for the auctioneer because it attracts more bidders 
C) Good for the bidders because they are less likely to bid more on the item than it's worth 
D) ​Both A&B 
A) ​Good for the bidders because it reduces the risk that they face 
B) Good for the auctioneer because it attracts more bidders 
C) Good for the bidders because they are less likely to bid more on the item than it's worth 
D) ​Both A&B

Question 9

​An oral auction

Accepted Answer

A) ​is also called a Vickrey auction 
B) is conducted by bidders submitting a single sealed bid 
C) is where the sole remaining bidder wins and pays his winning bid 
D) ​all of the above 
A) ​is also called a Vickrey auction 
B) is conducted by bidders submitting a single sealed bid 
C) is where the sole remaining bidder wins and pays his winning bid 
D) ​all of the above

Question 10

​An oral auction

Accepted Answer

A) ​is also called an English auction 
B) is where bidders submit increasing bids until all but one remains 
C) is where the sole remaining bidder wins and pays his winning bid 
D) ​all of the above 
A) ​is also called an English auction 
B) is where bidders submit increasing bids until all but one remains 
C) is where the sole remaining bidder wins and pays his winning bid 
D) ​all of the above

Question 11

Anna's Antiques expects to get two bidders for the unique china teacup it sells.Each of the bidders can either have a high-value of $100 or a low-value of $70 with equal probability.What is the expected revenue from setting the price at $70?

Accepted Answer

A) ​$60 
B) $70 
C) $80 
D) ​$100 
A) ​$60 
B) $70 
C) $80 
D) ​$100

Question 12

Anna's Antiques expects to get two bidders for the unique china teacup it sells.Each of the bidders can either have a high-value of $100 or a low-value of $70 with equal probability.If Anna receives $71 from the auction,she can infer that

Accepted Answer

A) ​Both the bidders were high value bidders 
B) Both the bidders were low value bidders 
C) One of the bidders was high value,while the other was low value 
D) ​All of the above 
A) ​Both the bidders were high value bidders 
B) Both the bidders were low value bidders 
C) One of the bidders was high value,while the other was low value 
D) ​All of the above

Question 13

Anna's Antiques expects to get three bidders for the unique china teacup it sells.Each of the bidders can either have a high-value of $100 or a low-value of $70 with equal probability.If three bidders show up at the auction and all of them are low-value bidders,what would the winning bid be?

Accepted Answer

A) ​Just above $100 
B) $100 
C) Just above $70 
D) ​$70 
A) ​Just above $100 
B) $100 
C) Just above $70 
D) ​$70

Question 14

​In a sealed-bid first price auction,if you notice that your competition is weaker,you should

Accepted Answer

A) ​Shade your bid more 
B) Shade your bid less 
C) Bid more aggressively 
D) ​Both B&C 
A) ​Shade your bid more 
B) Shade your bid less 
C) Bid more aggressively 
D) ​Both B&C

Question 15

​With which choice are you more likely to avoid Bid-rigging cartels?

Accepted Answer

A) ​Holding Vickery auctions 
B) Holding sealed-bid auctions 
C) Holding English auctions 
D) ​Both A&B 
A) ​Holding Vickery auctions 
B) Holding sealed-bid auctions 
C) Holding English auctions 
D) ​Both A&B

Question 16

​A second-price auction

Accepted Answer

A) ​is also called an English auction 
B) is where the highest bidder wins and pays the amount of the next highest bid 
C) is where the sole remaining bidder wins and pays his winning bid 
D) ​all of the above 
A) ​is also called an English auction 
B) is where the highest bidder wins and pays the amount of the next highest bid 
C) is where the sole remaining bidder wins and pays his winning bid 
D) ​all of the above

Question 17

​Experiencing the winner's curse in a common-value auction means

Accepted Answer

A) ​You lost money in the auction 
B) You bid too low 
C) Your estimate of the value of the good being auctioned was too optimistic 
D) ​Your estimate of the value of the good being auctioned was too pessimistic 
A) ​You lost money in the auction 
B) You bid too low 
C) Your estimate of the value of the good being auctioned was too optimistic 
D) ​Your estimate of the value of the good being auctioned was too pessimistic

Question 18

In an auction where the bidders values are $740,$700,$660,$650,$400,$325 and $300,the highest three bidders decide to form a bid-rigging cartel.What would the winning bid have been without the cartel?​

Accepted Answer

A) ​$741 
B) $701 
C) $661 
D) ​$631 
A) ​$741 
B) $701 
C) $661 
D) ​$631

Question 19

​A Vickery auction is

Accepted Answer

A) ​Strategically equivalent to an English auction 
B) Does not need to have bidders show up at the same time or place 
C) All of the above 
D) ​None of the above 
A) ​Strategically equivalent to an English auction 
B) Does not need to have bidders show up at the same time or place 
C) All of the above 
D) ​None of the above

Question 20

​A bid rotation scheme in a cartel is where

Accepted Answer

A) ​The cartel members do not participate in auctions 
B) The cartel members never bid against each other 
C) The cartel members take turns winning the bids and do not bid against the member whose turn it is to win 
D) ​All of the above 
A) ​The cartel members do not participate in auctions 
B) The cartel members never bid against each other 
C) The cartel members take turns winning the bids and do not bid against the member whose turn it is to win 
D) ​All of the above

Exam 16: Auctions

​In a common-value setting

​A second-price auction

​Bid-rigging is less likely in

Anna's Antiques expects to get three bidders for the unique china teacup it sells.Each of the bidders can either have a high-value of $100 or a low-value of $70 with equal probability .If three bidders show up at the auction,and two of the bidders are high-value,what would the winning price be?

​In common value auctions

In a common-value auction​

​The optimal bidding strategy for a second-price auction is

​Releasing more information,in a common-value auction is

​An oral auction

​An oral auction

Anna's Antiques expects to get two bidders for the unique china teacup it sells.Each of the bidders can either have a high-value of $100 or a low-value of $70 with equal probability.What is the expected revenue from setting the price at $70?

Anna's Antiques expects to get two bidders for the unique china teacup it sells.Each of the bidders can either have a high-value of $100 or a low-value of $70 with equal probability.If Anna receives $71 from the auction,she can infer that

Anna's Antiques expects to get three bidders for the unique china teacup it sells.Each of the bidders can either have a high-value of $100 or a low-value of $70 with equal probability.If three bidders show up at the auction and all of them are low-value bidders,what would the winning bid be?

​In a sealed-bid first price auction,if you notice that your competition is weaker,you should

​With which choice are you more likely to avoid Bid-rigging cartels?

​A second-price auction

​Experiencing the winner's curse in a common-value auction means

In an auction where the bidders values are $740,$700,$660,$650,$400,$325 and $300,the highest three bidders decide to form a bid-rigging cartel.What would the winning bid have been without the cartel?​

​A Vickery auction is

​A bid rotation scheme in a cartel is where

The One Lessor of Business

Benefits, Costs, and Decisions

Extent How Much Decisions

Investment Decisions: Look Ahead and Reason Back

Simple Pricing

Economies of Scale and Scope

Understanding Markets and Industry Changes

Market Structure and Long Run Equilibrium

Strategy: the Quest to Keep Profit From Eroding

Foreign Exchange, Trade, and Bubbles

More Realistic and Complex Pricing

Direct Price Discrimination

Strategic Games

Bargaining

Making Decisions With Uncertainty

The Problem of Adverse Selection

The Problem of Moral Hazard

Getting Employees to Work in the Firms Best Interest

Getting Divisions to Work in the Firms Best Interest

Managing Vertical Relationships

Filters

In a common-value setting

A second-price auction

Bid-rigging is less likely in

In common value auctions

In a common-value auction

The optimal bidding strategy for a second-price auction is

Releasing more information,in a common-value auction is

An oral auction

An oral auction

In a sealed-bid first price auction,if you notice that your competition is weaker,you should

With which choice are you more likely to avoid Bid-rigging cartels?

A second-price auction

Experiencing the winner's curse in a common-value auction means

In an auction where the bidders values are $740,$700,$660,$650,$400,$325 and $300,the highest three bidders decide to form a bid-rigging cartel.What would the winning bid have been without the cartel?

A Vickery auction is

A bid rotation scheme in a cartel is where