Which of the following about private value and common value auctions is true? A. In common value auctions bidders dont know their values b. In private value auctions bidders can suffer from the winners curse c. In common value
Added by Lori O.
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- Private value auctions are those where each bidder knows their own valuation of the item being auctioned, and this valuation is different for each bidder. - Common value auctions are those where the item has a single value that is the same for all bidders, Show more…
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In which of the following cases would a seller be least likely to use an auction to determine the price of an item? a) The seller is aware of each buyer's valuation of the item. b) Buyers' valuations of the item are interdependent. c) The seller overpaid for the item initially and is trying to recover some of his losses.
Jennifer S.
The "winner's curse" in auction bidding. In auction bidding, the "winner's curse" is the phenomenon of the winning (or highest) bid price being above the expected value of the item being auctioned. The Review of Economics and Statistics (Aug. 2001) published a study on whether bid experience impacts the likelihood of the winner's curse occurring. Two groups of bidders in a sealed-bid auction were compared: (1) super-experienced bidders and (2) less-experienced bidders. In the super-experienced group, 29 of 189 winning bids were above the item's expected value; in the less-experienced group, 32 of 149 winning bids were above the item's expected value. a) Find an estimate of p1, the true proportion of super-experienced bidders who fell prey to the winner's curse. b) Find an estimate of p2, the true proportion of the less-experienced bidders who fell prey to the winner's curse.
Adi S.
This factor contributes to the winner's curse a. your estimate of the value of the object was not the most optimistic b. your bid was not the highest c. there were many other bidders that you beat out d. you shaded your bid too much
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