Deck 18: Auctions

Question 1

A second-price auction

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

Answer 1

A

Question 2

More bidders increase the selling price at an oral auction because

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

Answer 2

C

Question 3

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

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

Answer 3

C

Question 4

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

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

Question 5

First-price auctions have all the following properties EXCEPT

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 6

The more bidders there are at an oral auction,

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 7

More bidders increase the selling price in a second-price auction because

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

Question 8

Ebay's use of "bidding agents" will

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 9

First-price auctions have all the following properties EXCEPT

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 10

The optimal bidding strategy for a second-price auction is

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 11

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

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

Question 12

If the bidders at a second-price auction have true values of $8,$7,$6,and $5,the item will sell for

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

Question 13

A second-price auction

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 14

A second-price auction

A)is also called a Vickrey auction
B)is conducted by bidders submitting a single sealed bid
C)is where the highest bidder wins and pays the amount of the next highest bid
D)all of the above

Question 15

An oral auction

A)is also called a Vickrey auction
B)is where bidders submit increasing bids until all but one remains
C)is where the highest bidder wins and pays the amount of the next highest bid
D)all of the above

Question 16

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

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

Question 17

An oral auction

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 18

The optimal bidding strategy for an oral auction is

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 19

The more bidders there are at a second-price auction,

A)the higher the expected selling price
B)the higher each bidder bids
C)the more each bidder will shade his bid
D)the less each bidder will shade his bid

Question 20

An oral auction

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 21

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

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

Question 22

Bid-rigging is less likely in

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

Question 23

In common value auctions

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 24

Bid-rigging has all of these features EXCEPT

A)It is a collusive agreement
B)The bid-riggers pay a smaller amount than without bid-rigging
C)Bid-riggers need an auxiliary mechanism to allocate the good within the bid-riggers
D)Bid rigging is usually a legitimate and legal strategy for the buyer-side

Question 25

This factor contributes to the winner's curse

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 26

Bid-rigging is more likely when

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

Question 27

This factor contributes to the winner's curse

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

Question 28

In common value auctions

A)Bidder do not 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 differs across bidders

Question 29

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

A)reveal all of the 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)do not hold oral auctions

Question 30

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

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 31

In common value auctions

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 32

If the bidders at a first-price auction have true values of $8,$7,$6,and $5,the item will sell for

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

Question 33

The following is not associated with bid-rigging

A)bid-riggers bidding their true value
B)"knockout" auctions
C)bid rotations
D)amnesty to the first conspirator willing to testify against fellow conspirators

Question 34

Bid-rigging is more likely when

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 35

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

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 36

Bid-rigging is more likely when

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

Question 37

In common value auctions

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 38

This factor contributes to the winner's curse

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

Question 39

This factor contributes to the winner's curse

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

Question 40

The winners curse is more often associated with;

A)oral auctions
B)second-price auctions
C)first-price sealed bid auctions
D)common value auctions