Question 1

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 2

More bidders increase the selling price at an oral auction because

Accepted Answer

A) bidders bid more aggressively 
B) the true value of the winner is higher 
C) the true values of the losers is higher 
D) bidders shade their bids by less 
A) bidders bid more aggressively 
B) the true value of the winner is higher 
C) the true values of the losers is higher 
D) bidders shade their bids by less

Question 3

To attract more bidders,and more aggressive bidders,to your auction

Accepted Answer

A) withhold relevant information about the value of the object 
B) don't allow bidders to know how others are bidding 
C) do not allow potential bidders to examine the object too closely 
D) hold oral auctions 
A) withhold relevant information about the value of the object 
B) don't allow bidders to know how others are bidding 
C) do not allow potential bidders to examine the object too closely 
D) hold oral auctions

Question 4

The more bidders there are at an oral auction,

Accepted Answer

A) the higher the expected selling price 
B) the higher each bidder bids 
C) the longer that each bidder will continue to bid 
D) the less each bidder will shade his bid 
A) the higher the expected selling price 
B) the higher each bidder bids 
C) the longer that each bidder will continue to bid 
D) the less each bidder will shade his bid

Question 5

If the bidders at an oral auction have true values of $78,$72,$66,and $65,the item will sell for

Accepted Answer

A) $78 
B) just under $78 
C) $72 
D) just over $72 
A) $78 
B) just under $78 
C) $72 
D) just over $72

Question 6

In common value auctions

Accepted Answer

A) Every bidder know the value of the object being sold 
B) Each bidder makes their own estimate of the value of the good 
C) All bidders 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 their own estimate of the value of the good 
C) All bidders know the estimates of the others 
D) The true value of the item differs across bidders

Question 7

If the bidders at a second-price auction have true values of $78,$72,$66,and $65,the item will sell for

Accepted Answer

A) $78 
B) just under $78 
C) $72 
D) just over $72 
A) $78 
B) just under $78 
C) $72 
D) just over $72

Question 8

This factor contributes to the winner's curse

Accepted Answer

A) your estimate of the value of the object was the most optimistic 
B) your bid was not the highest 
C) there were not many other bidders you had to beat out 
D) you did not shade your bid enough 
A) your estimate of the value of the object was the most optimistic 
B) your bid was not the highest 
C) there were not many other bidders you had to beat out 
D) you did not shade your bid enough

Question 9

To attract more bidders,and more aggressive bidders,to your auction

Accepted Answer

A) withhold relevant information about the value of the object 
B) allow bidders to know how others are bidding 
C) do not allow potential bidders to examine the object too closely 
D) do not hold oral auctions 
A) withhold relevant information about the value of the object 
B) allow bidders to know how others are bidding 
C) do not allow potential bidders to examine the object too closely 
D) do not hold oral auctions

Question 10

First-price auctions have all the following properties EXCEPT

Accepted Answer

A) Highest bid wins 
B) Highest bidder pays her winning bid 
C) The good is assigned to the second-highest bidder 
D) The price is set to the highest bid 
A) Highest bid wins 
B) Highest bidder pays her winning bid 
C) The good is assigned to the second-highest bidder 
D) The price is set to the highest bid

Question 11

If the bidders at a first-price auction have true values of $78,$72,$66,and $65,the item will sell for

Accepted Answer

A) $78 
B) just under $78 
C) $72 
D) just over $72 
A) $78 
B) just under $78 
C) $72 
D) just over $72

Question 12

First-price auctions have all the following properties EXCEPT

Accepted Answer

A) Highest bid wins 
B) Highest bidder pays the second highest bid 
C) The good is assigned to the highest bidder 
D) The price is set to the highest bid 
A) Highest bid wins 
B) Highest bidder pays the second highest bid 
C) The good is assigned to the highest bidder 
D) The price is set to the highest bid

Question 13

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 14

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) All bidders know the estimates of the others 
D) The true value of the item is common 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) All bidders know the estimates of the others 
D) The true value of the item is common across bidders

Question 15

Bid-rigging is more likely when

Accepted Answer

A) auctions are larger 
B) auctions are infrequent 
C) auctions generate different sets of potential bidders 
D) the auctioneer is paid a fixed fee rather than on commission 
A) auctions are larger 
B) auctions are infrequent 
C) auctions generate different sets of potential bidders 
D) the auctioneer is paid a fixed fee rather than on commission

Question 16

Bid-rigging is less likely in

Accepted Answer

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

Question 17

The optimal bidding strategy for an oral auction is

Accepted Answer

A) To shade your bid below your true value and drop out well before it is reached 
B) To shade your bid below your true value and drop out just when the shaded amount is reached 
C) To bid drop out when the bidding exceeds your true value 
D) To size up your competition to determine how much to shade your bid 
A) To shade your bid below your true value and drop out well before it is reached 
B) To shade your bid below your true value and drop out just when the shaded amount is reached 
C) To bid drop out when the bidding exceeds your true value 
D) To size up your competition to determine how much to shade your bid

Question 18

Ebay's use of "bidding agents" will

Accepted Answer

A) effectively turn an English auction into a Vickery auction 
B) effectively turn a Vickery auction into an English auction 
C) decide how much to shade your bid for you 
D) make you a more aggressive bidder 
A) effectively turn an English auction into a Vickery auction 
B) effectively turn a Vickery auction into an English auction 
C) decide how much to shade your bid for you 
D) make you a more aggressive bidder

Question 19

If the bidders at an oral auction have true values of $8,$7,$6,and $5,the item will sell for

Accepted Answer

A) $8 
B) $7 
C) just over $7 
D) just under $7 
A) $8 
B) $7 
C) just over $7 
D) just under $7

Question 20

This factor contributes to the winner's curse

Accepted Answer

A) your estimate of the value of the object was not the most optimistic 
B) your bid was not the highest 
C) there were many other bidders that you beat out 
D) you did not shade your bid enough 
A) your estimate of the value of the object was not the most optimistic 
B) your bid was not the highest 
C) there were many other bidders that you beat out 
D) you did not shade your bid enough

Exam 18: Auctions

In common value auctions

More bidders increase the selling price at an oral auction because

To attract more bidders,and more aggressive bidders,to your auction

The more bidders there are at an oral auction,

If the bidders at an oral auction have true values of $78,$72,$66,and $65,the item will sell for

In common value auctions

If the bidders at a second-price auction have true values of $78,$72,$66,and $65,the item will sell for

This factor contributes to the winner's curse

To attract more bidders,and more aggressive bidders,to your auction

First-price auctions have all the following properties EXCEPT

If the bidders at a first-price auction have true values of $78,$72,$66,and $65,the item will sell for

First-price auctions have all the following properties EXCEPT

An oral auction

In common value auctions

Bid-rigging is more likely when

Bid-rigging is less likely in

The optimal bidding strategy for an oral auction is

Ebay's use of "bidding agents" will

If the bidders at an oral auction have true values of $8,$7,$6,and $5,the item will sell for

This factor contributes to the winner's curse

The One Lessor of Business

Benefits, Costs, and Decisions

Extent How Muchdecisions

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 Indirect 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