week13da - Spring, 2010 DecisionAnalysis MS405 Auctions...

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Kemal Kılıç, Sabancı Üniversitesi Kemal Kılıç, Sabancı Üniversitesi Spring Spring , 2010 , 2010 Week 13 1 Decision Analysis   MS 405    Auctions Kemal Kılıç Faculty of Engineering and Natural Sciences
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Kemal Kılıç, Sabancı Üniversitesi Kemal Kılıç, Sabancı Üniversitesi Spring Spring , 2010 , 2010 Week 13 2 Why study auctions? Price formation (Dynamic pricing) Practical significance Frequency spectrum (billions of $) Right to harvest timber or mining rights B2B, B2C, C2C online markets; E-bay: on-line garage sales Stock market: double auction Privatization
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Kemal Kılıç, Sabancı Üniversitesi Kemal Kılıç, Sabancı Üniversitesi Spring Spring , 2010 , 2010 Week 13 3 Why hold an auction? Prices are unknown A stone from the moon Paintings of Kenan Evren Fresh fish IBM stocks Fairness or appearance of fairness Rights to an oil tract Government contracts Specific situations Bankruptcy sales
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Kemal Kılıç, Sabancı Üniversitesi Kemal Kılıç, Sabancı Üniversitesi Spring Spring , 2010 , 2010 Week 13 4 Classification of Auctions Broad classification on the basis of three key attributes Interaction format Open Closed Who controls the bids/offers, ascending/descending Buyer/Seller Pricing up(English)/Pricing down(Dutch) Policy for setting prices Winner pays the highest price Vickrey auction winner pays the highest non winning bid price
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Kemal Kılıç, Sabancı Üniversitesi Kemal Kılıç, Sabancı Üniversitesi Spring Spring , 2010 , 2010 Week 13 5 Additional Policy Variations Anonymity Open cry Reveal identity of bidder or association between bidder and bid Sealed Reveal identity after close (not all bids/ only the winning bids) Restrictions on bid amount Minimum starting price, reserve price (A seller specified bid level below which no sale is made), bid increment Rules for closing the auction Fixed, multiple rounds, Inactivity, reserve price met, at time of deal
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Kemal Kılıç, Sabancı Üniversitesi Kemal Kılıç, Sabancı Üniversitesi Spring Spring , 2010 , 2010 Week 13 6 Additional Policy Variations Evaluation rules and breaking tied bids Parameters - Delivery, rating, location, shipper, recent transaction history of bidder
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Kemal Kılıç, Sabancı Üniversitesi Kemal Kılıç, Sabancı Üniversitesi Spring Spring , 2010 , 2010 Week 13 7 Auction Process Initial Buyer/Seller Registration Setting up a particular auction event Choosing the auction method Scheduling the auction event Alerting potential buyers Security considerations Restricted access Bidding Notification Terms and Conditions Deposits with bids Security Considerations Retraction of auction and bids Evaluation of Bids and closing Trade settlement
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This note was uploaded on 12/19/2011 for the course ECON Econ203 taught by Professor Majdabpadawnan during the Spring '11 term at University of Maribor.

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week13da - Spring, 2010 DecisionAnalysis MS405 Auctions...

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