Deck 17: Dynamic Trading: E-Auctions, bartering, and Negotiations

Question 1

Through e-auctions,sellers can gain more customer dollars by offering items directly rather than through an expensive intermediary or by using an expensive physical auction.

Answer 1

True

Question 2

Specialized sites for vertical auctions are referred to as auction vortals.

Answer 2

True

Question 3

A popular type of auction model where there is one buyer and many potential sellers is the "name-your price" model that was pioneered by eBay.com.

Answer 3

False

Question 4

Reverse auctions have two major purposes: liquidation and market efficiency.

Question 5

Dynamic pricing refers to a transaction in which the price is not fixed,but fluctuates based on current supply-and-demand relationships.

Question 6

Third-party escrow services are used for products valued at more than $200 to protect both the buyer and seller when either the buyer or seller feels the need for additional security.

Question 7

Specialized authentication services are very effective and widely used to determine whether an item is genuine and described correctly as a way to protect against all counterfeit products.

Question 8

In addition to auctions,dynamic prices can be determined by online negotiation,which is the back-and-forth process of bargaining until a buyer and seller reach a mutually agreeable price.

Question 9

A major benefit of e-auctions is the reduced rate of fraud because of the openness of the transaction.

Question 10

Negotiating prices transfers the burden of determining prices to the market itself so the resulting negotiated prices will always be fair and effective.

Question 11

Double-auction markets tend to generate competitive outcomes because a double auction is an interactive market in which both buyers and sellers are competitive.

Question 12

In some types of auctions,sellers offer product;and in other types of auctions,buyers post their product needs.

Question 13

Bid shielding is a type of e-auction fraud where sellers place phantom bidders to bid up the price of items they are selling and hide (shield)low bids by actual potential buyers.

Question 14

The "name-your-own-price" model is based on the fundamental concept of the downward-sloping supply curve in which prices vary based on supply.

Question 15

B2B reverse auctions are gaining popularity as an online mechanism for buying goods and services.

Question 16

The Internet provides an infrastructure for executing auctions with many more participating sellers and buyers than with offline auctions,but administrative costs are higher.

Question 17

Prices paid in online auctions are lower when auctions are an alternative selling channel rather than an exclusive selling arrangement.

Question 18

Barter agents are software that can support the back-and-forth process of online negotiation.

Question 19

Entering a high bid without ever planning to pay for the auction item is called sniping.

Question 20

An auction that takes place between sellers and buyers in one industry or for one commodity is called a vertical auction because activity goes up and down the supply chain in a single industry,rather than horizontally between members of supply chains in different industries.

Question 21

Auctions may be used as a strategic tool by both online and offline companies.This type of strategic alliance will be very popular due to its win-win possibilities.

Question 22

The ________ auction model is popular in B2B.

A)one-buyer,one-seller
B)one seller,many potential buyers
C)one buyer,many potential sellers
D)many buyers,many sellers

Question 23

Dynamic pricing refers to:

A)prices that are negotiated.
B)prices that are regulated by government agencies.
C)prices that maximize revenue.
D)prices that are determined by market forces.

Question 24

Limitations of e-auctions include all of the following except:

A)dynamic pricing
B)risk of fraud
C)long cycle time
D)higher order fulfillment costs

Question 25

Benefits of e-auctions to sellers include all of the following except:

A)larger reach and increased revenues
B)anonymity
C)removal of expensive intermediaries
D)lower transaction and administrative costs

Question 26

Two purposes of a type of ________ auctions are liquidation and market efficiency.

A)one-buyer,one-seller
B)one seller,many potential buyers
C)one buyer,many potential sellers
D)many buyers,many sellers

Question 27

All of the following are potential benefits from auctions to sellers except:

A)Auctions can broaden the customer base and reduce cycle time.
B)Sellers receive valuable price sensitivity information.
C)Sellers are always anonymous.
D)Sellers can liquidate large quantities of obsolete items very quickly.

Question 28

Auctions done in exchanges or double auctions are ________ auctions.

A)one-buyer,one-seller
B)one seller,many potential buyers
C)one buyer,many potential sellers
D)many buyers,many sellers

Question 29

________ work best when there are many buyers and many sellers.

A)Bartering
B)Dynamic exchanges
C)Forward auctions
D)Reverse auctions

Question 30

Privacy is one of the benefits of mobile auctions because the Internet cell phone is more private than a PC.

Question 31

The process of building auction applications is easy because of intelligent agents and other building tools.

Question 32

When a company decides to use auctions as a sales channel,one of the strategic B2B issues is the potential conflict with existing distributors and distribution channels.Therefore,some companies use auctions only to liquidate obsolete,used,refurbished,or damaged products.

Question 33

Auctions are all of the following except:

A)They are suitable for most consumer goods.
B)They are a market mechanism.
C)They are an established method of commerce for generations.
D)They are a marketing channel.

Question 34

Research has shown that e-commerce sites that use an auction model tend to:

A)reach critical mass more quickly than catalog-order-based models.
B)reach critical mass more slowly than other models.
C)become liquid.
D)fail more often than other models.

Question 35

________ refers to the tendency of customers to stay at Web sites longer and come back more often.

A)High repeat
B)Loyalty
C)Frequent purchase
D)Stickiness

Question 36

WineryExchange.com successfully auctioned grapes to wineries,which ended the tradition of sales being based on established relationships between grape growers and wineries.

Question 37

A(n)________ takes place between sellers and buyers in one industry or for one commodity,such as flowers,cars,or cattle.

A)open auction
B)vertical auction
C)exchange
D)negotiation vortal

Question 38

Reverse auctions are a type of ________ auctions.

A)one-buyer,one-seller
B)one seller,many potential buyers
C)one buyer,many potential sellers
D)many buyers,many sellers

Question 39

In e-auctions,near-perfect market information is available about prices,products,current supply and demand,and so on.This feature provides benefits to ________.

A)companies and individuals
B)buyers
C)sellers
D)buyers and sellers

Question 40

The "name-your own-price" model pioneered by Priceline.com is a type of ________ auction.

A)one-buyer,one-seller
B)one seller,many potential buyers
C)one buyer,many potential sellers
D)many buyers,many sellers

Question 41

The practice by sellers of having associates place fake bids in an auction as a way to drive up the selling price is called:

A)bid fixing.
B)shilling.
C)sniping.
D)bid shielding.

Question 42

The first step in the auction process is:

A)registration and participants' profiles.
B)preparing the bids.
C)arranging financing.
D)searching and comparing.

Question 43

Many companies use intermediaries or trading assistants instead of implementing e-auctions themselves for each of the following reasons except:

A)The company name is not widely recognized.
B)It can bring many more buyers to the auction.
C)They can avoid tax and legal fees.
D)Costs of auction intermediaries or assistants are less than the costs of physical auctions.

Question 44

An ________ is a market mechanism by which sellers place items for buyers to make bids on or buyers place RFPs for specific items and sellers place bids to win the jobs.

Question 45

In a second-price sealed-bid auction,which is known as a ________,the item is awarded to the highest bidder,but at the second-highest price that was bid to alleviate bidders' fears of significantly exceeding the item's true market value.

Question 46

The limitations of mobile auctions are all of the following except:

A)Portable devices are small and may have a problem showing pictures of auction items.
B)Internet cell phones are less private than a PC.
C)Internet-enabled phones have limited memory capacity.
D)Wireless systems are not as safe as wireline ones.

Question 47

Each of the following is true about auction rules except:

A)The success of auctions depends on complying with auction rules.
B)Rules eliminate conflicts with existing distributors and distribution channels.
C)Rules are intended to smooth the auction mechanism and to prevent fraud.
D)Auction rules vary from country to country due to legal considerations.

Question 48

Each of the following is one of the three major categories of auction rules except:

A)timing rules
B)bidding rules
C)clearing rules
D)information-revelation rules

Question 49

The process of building auction applications is complex for all of the following reasons except:

A)The number of needed features can be very large.
B)Auctions must be integrated with the back-end offices.
C)Auctions must be integrated with the legacy systems of participating companies.
D)Auctions must provide payment systems.

Question 50

Compared to competitive markets,auction selling prices are often ________ when there are multiple bidders.

A)lower
B)higher
C)the same
D)dynamic

Question 51

________ are an example of one seller,many potential buyers auctions in which a bidder bids only once.

Question 52

Bidders sometimes use phantom bidders to drive bid prices up rapidly at the beginning of an auction,thus discouraging bidding from legitimate bidders.At the last minute,the phantom bidders pull out,which awards the item to a very low bidding customer.This practice is called:

A)bid fixing.
B)shilling.
C)sniping.
D)bid shielding.

Question 53

Jackie uses a software system to place bids automatically on her behalf until her predetermined maximum price is reached.The software bids in such a way as to minimize the final bid.This is referred to as:

A)proxy bidding.
B)bidding agents.
C)pricing agents.
D)sniping.

Question 54

Many auction sites are implementing ________ because of the significant increase in the number of users who browse the Internet wirelessly.

A)authentication
B)vortals
C)m-commerce applications
D)instant message notification

Question 55

A major shortcoming with authentication services is:

A)two different authenticators may come up with different opinions regarding the authenticity and description of a given item.
B)it is impossible to tell whether many items are reproductions or genuine.
C)dishonest authenticators are the primary sources of fraud on the Internet.
D)most auction sites forbid the use of authentication services.

Question 56

The most serious disadvantage of e-auctions is:

A)risk of fraud.
B)logistics.
C)unreliable auction software.
D)payment delays.

Question 57

Compared to competitive markets,auction prices are often ________ when there are very few bidders.

A)lower
B)higher
C)the same
D)dynamic

Question 58

One seller uses a ________ to offer a product to many potential bidders.

Question 59

Through ________,buyers and sellers are able to adjust pricing strategies and optimize product inventory levels very quickly.

Question 60

John wants to know if the first edition novel he just purchased through an e-auction is actually a first edition.The auction host helps him locate an expert that will tell him whether the novel is a genuine first edition or a fake.This is an example of:

A)integrity.
B)verification.
C)authentication.
D)certification.

Question 61

A type of auction fraud that uses phantom bidders to bid at a very high price when an auction begins and which pull out at the last minute is called ________.

Question 62

The success of auctions depends on complying with ________,which are intended to smooth the auction mechanism and to prevent fraud.

Question 63

In a ________,multiple buyers and sellers may be making bids and offers simultaneously,as with stock trading.

Question 64

Truckers or airlines selling unused capacity at the last minute usually do so at a lower price.These are examples of ________.

Question 65

To encourage people to auction online,eBay and some other auction sites provide ________,or advisors.

Question 66

Compared with competitive (nonauction)markets,prices in forward auctions tend to be ________.

Question 67

A fundamental reason for lower online auction prices is that an online auction is usually an ________ rather than an exclusive selling arrangement.

Question 68

A type of auction pioneered by Priceline.com that has one buyer and many potential sellers is the ________ model.

Question 69

Dynamic prices also can be determined by ________,a back-and-forth process of bargaining until a buyer and seller reach a mutually agreeable price.

Question 70

The oldest method of trade known as ________ is an exchange of goods and services.

Question 71

In reverse auctions,the ________ is reduced sequentially,

Question 72

A software system can be used for ________,in which the system operates as an agent to place bids on behalf of buyers.

Question 73

A ________,or auction vortal,takes place between sellers and buyers in one industry or for one commodity.

Question 74

When the act of entering a bid during the very last seconds of an auction and outbidding the highest bidder is done using an electronic tool,it is called ________.

Question 75

________ involves selling or auctioning several related products or services together.

Question 76

________ is bartering conducted online,frequently in a bartering exchange to improve the matching process by inducing more customers to take part in the exchange.

Question 77

Prices in auctions are lower in cases of ________,in which the seller's objective is to sell as quickly as possible.

Question 78

________ refers to the tendency of customers to stay at Web sites longer and come back more often.

Question 79

________ are companies that use software agents to visit Web auction sites,find information,summarize and organize it,and deliver it to users.

Question 80

The problem with bartering is that it is often difficult to find partners,so ________,in which intermediaries arrange the matching and transactions,were created to address this problem.