ch23 - Chapter 23 Auctions and Auction Markets Learning...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
187 Chapter 23: Auctions and Auction Markets Learning Objectives Students should learn to: 1. Distinguish between a private value auction and an auction in common values. 2. Explain the different auction mechanisms: a. Ascending-bid (English) v. descending-bid (Dutch) b. Open outcry v. sealed bid c. First price v. second price 3. Explain why bidding your valuation is a dominant strategy in second-price, private- values auctions. 4. Describe the Revenue Equivalence Theorem results: a. Equivalence of English and second price sealed-bid auctions b. Equivalence of Dutch and first price sealed-bid auctions c. Equivalence of all four types of auctions 5. Explain the winner’s curse. 6. Construct a bidding strategy that avoids the winner’s curse. 7. Discuss anticompetitive bidding practices and the way auction design may mitigate cooperation among bidders. Lecture Hints Spend two fifty-minute long lectures on this chapter. Lecture 1: 1. Private values v. common values 2. Types of auctions i) English: ascending-bid, open outcry ii) Dutch: descending-bid, open outcry iii) Sealed bid first price iv) Vickrey: sealed bid second price 3. Bidding your valuation as a dominant strategy in a Vickrey auction 4. Equivalence of Vickrey and English auctions 5. Equivalence of Dutch and first price sealed bid auctions Lecture 2: 1. Revenue Equivalence Theorem 2. The winner’s curse 3. Avoiding the winner’s curse by shading your bid 4. Anticompetitive bidding strategies and public policy
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern