24-Auctions (I)

24-Auctions (I) - Agenda Course Overview Allocating Goods...

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1 Agenda Course Overview Allocating Goods through Auctions Types of Auctions and Bidding rules Bidding in a First-Price auction What To Take Away Managerial Economics The Structure of the Course Consumers and Producers Market Structure Uncertainty Perfect competition Monopoly Oligopoly Auctions Asymmetric Information Strategy Introduction to markets Today’s lecture Consumer choice Technology and Production
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2 Agenda Course Overview Allocating Goods through Auctions Types of Auctions and Bidding rules Bidding in a First-Price auction What To Take Away Allocation of goods through Auctions Auctions are one of the oldest means to allocate goods among individuals. An auction has rules that specify how bidders can submit bids for a good (or a package of goods), how the good is allocated among the bidders based on the bids, and how much each bidder pays to the auctioneer. Its use remains pervasive nowadays: Art objects and antiques Estate sales Tobacco, Fish, Fresh flowers Scrap metal Gold bullion Long term securities issued by US Treasury and Corporate Bonds Timber rights Off shore oil leases Telecom licenses (notably 3G in Europe and Spectrum Auctions in US) Internet Auction sites (Ebay, etc…) Procurement via competitive bidding
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3 The Tsukiji Market ( 築地市場 ) in downtown Tokyo is the biggest wholesale fish and seafood market in the world (7 times bigger than Paris’s Rungis and 11 times bigger than NYC’s Fulton Fish Market) Tuna Auctions in Tokyo Wholesale Market There are two distinct sections. The main wholesale takes place in the inner market through auctions. Only licensed participants can participate in these auctions. Tuna are sold each morning through an auction format. Tuna brought from all over the world (both fresh and frozen tuna are auctioned) are arranged in the floor of a special section devoted to the wholesale of tuna. Tuna Auctions in Tokyo Wholesale Market
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4 The auction starts typically at 5:20 am when licensed participants are allowed to inspect the fish. Tuna Auctions in Tokyo Wholesale Market All the tuna are divided according to type (bluefin, yellowfin, etc…) , size and origin. Each section is auctioned individually. Auctions start around 6:15 and typically end by 6:45. In that time an average of 1400 individual units are sold! Tuna Auctions in Tokyo Wholesale Market
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5 Deregulation and the auctioning of telecom licenses Licenses in Central America and South America European 3G auctions US Spectrum Auction The United States Department of the Treasury, through the Federal Reserve Bank of New York (FRBNY), raises funds for the U.S. Government using a Dutch auction.
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24-Auctions (I) - Agenda Course Overview Allocating Goods...

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