Question 1

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

Accepted Answer

In a common value auction where bidders have independent private values, the winning bid tends to be just above the second-highest valuation among the bidders. Since two bidders value the teacup at $100 and one at $70, the winning price would be just above the second-highest value, which is $100.

Question 2

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 high-value bidders,what would the winning bid be?
A)​Just above $100
B)$100
C)Just above $70
D)​$70

Accepted Answer

Since all three bidders are high-value bidders, the highest bid that can be made will be $100. None of the bidders will bid less than the maximum value they are willing to pay. Therefore, the winning bid will be $100.

Question 3

​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

Accepted Answer

A second-price auction is also known as a Vickrey auction, where bidders submit sealed bids, and the highest bidder wins but only pays the amount of the second-highest bid. Options B and C describe a different type of auction known as an English auction.

Question 4

​_______losing bidders lead to _____winning bids
A)​Stronger;raise
B)Weaker;reduce
C)Stronger;raise
D)​None of the above

Accepted Answer

Stronger competition among bidders typically leads to higher winning bids as each bidder pushes to outdo the others.

Question 5

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 low value,what would the winning price be?
A)​Just above $100
B)$100
C)Just above $70
D)​$70

Accepted Answer

Since two of the bidders have a low-value of $70, it is more likely that the winning bidder will choose a bid at or just above the low-value price rather than going for the high-value price. Therefore, the winning price is likely to be just above $70.

Question 6

​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

Accepted Answer

In a second-price auction, the highest bidder wins but pays the amount of the second highest bid. Options A and C describe different types of auctions.

Question 7

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 $100 from the auction she can infer that
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

Accepted Answer

If Anna receives $100 from the auction, it implies that both bidders were willing to pay up to that amount, indicating they both had a high value for the teacup. In auctions, the final price often reflects the valuation of the second-highest bidder (plus a bid increment), so for the price to reach $100, both bidders must value it at least that much, suggesting they are both high-value bidders.

Question 8

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 $70 from the auction,she can infer that
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

Accepted Answer

If Anna receives $70 from the auction, it means that both the bidders bid the low value of $70. Therefore, the best choice is option B - Both the bidders were low-value bidders. Options A and C are not possible in this scenario.

Question 9

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)​$741
B)$701
C)$661
D)​$631

Accepted Answer

Without the cartel, the highest bid would come from the highest bidder, who values the item at $740. The winning bid would need to be just above the second highest bidder's value of $700, hence $701.

Question 10

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 be in this auction?
A)​$741
B)$701
C)$651
D)​$631

Accepted Answer

The three highest bidders are $740, $700, and $660. If they form a cartel, they can agree to bid $1 more than the second-highest bidder among themselves. In this case, the winning bid would be $661. However, since the cartel members would be paying each other back the difference between their own bid and the winning bid, they want to keep the winning bid as low as possible to minimize their payments to each other. Therefore, they will instead agree to bid $1 more than the fourth-highest bidder among themselves, which is $650. Thus, the winning bid would be $651.

Question 11

​In a sealed-bid first price auction,if you notice that your competition is weaker,you should
A)​Shade your bid more
B)Shade your bid less
C)Bid more aggressively
D)​Both B&C

Accepted Answer

The answer of ​In a sealed-bid first price auction,if you...

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 holds an auction between the two customers,the expected value of this auction is
A)​$70
B)$78
C)$85
D)​$100

Accepted Answer

The expected value of the auction is the average of the possible outcomes, weighted by their probabilities. The possible outcomes are $100 and $70, each with a probability of 1/2. Therefore, the expected value is (1/2) * $100 + (1/2) * $70 = $85.

Question 13

​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

Accepted Answer

All of the statements are correct regarding a second-price auction, also known as a Vickrey auction. In this type of auction, bidders submit one sealed bid without knowing the bids of the others, the highest bidder wins, but the price paid is the second-highest bid.

Question 14

In an auction where the bidders values are $400,$500,$650,$800 and $850,the highest two bidders form a bid-rigging cartel.What would have the winning bid been if there was no cartel?
A)​$501
B)$651
C)$801
D)​$846

Accepted Answer

Without the cartel, the highest bidder would win the auction, so the winning bid would be $850. However, since the highest two bidders form a cartel, they can agree to bid lower than their true values to secure the win and pay a lower price. Let's assume they agree to bid $800, which is lower than the second-highest bidder's true value of $850 but higher than the third-highest bidder's true value of $650. In this case, the cartel wins the auction with a bid of $800, and the winning bid is $800.

Question 15

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
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

Accepted Answer

If both bidders were high-value bidders, then the teacup would have sold for at least $100, so Anna would have received more than $71. Similarly, if both were low-value bidders, the teacup would have sold for at most $70, so Anna wouldn't have received $71. Therefore, we can infer that one of the bidders was high-value and the other was low-value, resulting in a sale price of $71.

Question 16

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

Accepted Answer

If all three bidders are low-value bidders, the winning bid would be just above $70.

Question 17

​In a sealed-bid first price auction,if you notice that your competition is stronger,you should
A)​Shade your bid more
B)Shade your bid less
C)Bid more aggressively
D)​Both B&C

Accepted Answer

In a sealed-bid first-price auction, if you notice that your competition is stronger, you should shade your bid less (to increase your chances of winning by bidding closer to your true valuation) and bid more aggressively (to outbid the strong competition). Both strategies aim to improve your chances against stronger competitors.

Question 18

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 holds an auction between the two bidders,and both have high values,she would earn ___ from the auction.
A)​Just above $100
B)$100
C)Just above $70
D)​$70

Accepted Answer

If both bidders have high values and they both bid, Anna will receive the highest bid of $100. This is the maximum amount she can earn from the auction.

Question 19

In an auction where the bidders values are $400,$500,$650,$800 and $850,the highest two bidders form a bid-rigging cartel.What would be the winning bid in this auction?
A)​$501
B)$651
C)$801
D)​$846

Accepted Answer

The answer of In an auction where the bidders values...

Question 20

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 holds an auction between the two bidders,and both the bidders have low values,she would earn ___ from the auction.
A)​Just above $100
B)$100
C)Just above $70
D)​$70

Accepted Answer

If both bidders have low values of $70, the highest bid they would be willing to make is $70, resulting in Anna earning $70 from the auction.

Quiz 16: Auctions

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?

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 high-value bidders,what would the winning bid be?

A second-price auction

___losing bidders lead to _winning bids

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 low value,what would the winning price be?

A second-price 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.If Anna receives $100 from the auction she can infer that

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 $70 from the auction,she can infer that

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?

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 be in this auction?

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

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 holds an auction between the two customers,the expected value of this auction is

A second-price auction

In an auction where the bidders values are $400,$500,$650,$800 and $850,the highest two bidders form a bid-rigging cartel.What would have the winning bid been if there was no cartel?

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 stronger,you should

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 holds an auction between the two bidders,and both have high values,she would earn ___ from the auction.

In an auction where the bidders values are $400,$500,$650,$800 and $850,the highest two bidders form a bid-rigging cartel.What would be the winning bid in this auction?

Quiz 16: Auctions

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?

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 high-value bidders,what would the winning bid be?

​A second-price auction

​_______losing bidders lead to _____winning bids

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 low value,what would the winning price be?

​A second-price 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.If Anna receives $100 from the auction she can infer that

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 $70 from the auction,she can infer that

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?​

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 be in this auction?

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

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 holds an auction between the two customers,the expected value of this auction is

​A second-price auction

In an auction where the bidders values are $400,$500,$650,$800 and $850,the highest two bidders form a bid-rigging cartel.What would have the winning bid been if there was no cartel?

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 stronger,you should

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 holds an auction between the two bidders,and both have high values,she would earn ___ from the auction.

In an auction where the bidders values are $400,$500,$650,$800 and $850,the highest two bidders form a bid-rigging cartel.What would be the winning bid in this auction?

A second-price auction

___losing bidders lead to _winning bids

A second-price auction

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?

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

A second-price auction

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