Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Microeconomics Expert

Answer the problems below as best as you can – you can answer formally, or informally; however, when possible, formal answers might be more precise, and to that effect convincing.

problem: As in class there is some set N of bidders in an auction of one object, which the seller of the object can deliver at 0 cost. Suppose each bidder i’s valuation of the object is given by some parameter vi ≥ 0 which is only known to bidder i.

1) Suppose the auction format is the first-price auctions, where bidders simultaneously prepare their bids, submit them, and the winning bidder (the one with the highest bid) pays her bid. Would bidders want to bid their valuations, below their valuations, or above their valuations?

2) Suppose now that the auction proceeds as follows: initially some low price is announced, say p0 = 0, and it keeps being increased continuously through time, e.g., at time t, p(t) = t. At each moment, all biders who still want to remain in the auction keep their hands raised; at the moment a bidder wants to drop out she lowers her hand (and she can’t raise it again). The object is awarded to the last bidder with the raised hand. At what price would a bidder want to lower her hand?

3)  Suppose that each bidder i’s valuation of the object is now given by mini∈N vi, where still only vi is known to bidder i (so now in most cases she can’t be certain about the value of the object). All bidders again simultaneously submit their bids (e.g., in sealed envelopes), and the object is awarded to the highest bidder at the price p = 1/N ∑i∈N bi, where bi is the bid of bidder i. How would the bidders want to bid now?

4) For the case where each bidders’ valuation is given by vi (only known to i), what would you suggest to the seller if he wanted to devise the auction to raise as much revenue as possible?

problem: There are now a number of sellers from set M, and buyers from set N. Each seller j can deliver one unit of the good at some price cj ≥ 0which is only known to him, and each buyer i desires to buy at most one unit of the good, which she values at vi, only known to her.

1) Suppose there is only 1 seller. He runs an auction in which the winning bidder (the highest bidder) pays the price equal to the second-highest bid. If the seller wanted to make sure to not make a loss, what would he want to add to the rules of the auction?

2) Suppose there is only 1 buyer and the sellers now simultaneously propose different auction formats to her. She then decides with which seller she will go. What kind of auction formats would sellers propose to the buyer?

3) To make things simple suppose now that 0 ≤ c1 ≤ c2 ≤ ...cm ≤ 1 and 0 ≤ vn ≤vn−1... ≤ v1 ≤ v0. Think of sellers as the supply and buyers as the demand.

Further assume that k is the number such that ck < vk but ck+1 > vk+1, and that it so happens that ck < vk+1 < ck+1 < vk.

i) What does k represent? (Draw a graph)

ii) Suppose sellers and buyers simultaneously prepare their asks (sellers) and bids (buyers) and submit them. The price pa that the sellers obtain is determined as the minimal submitted bid (call it b), such that all sellers who deliver the goods at that bid were actually asking less than b (suppose that the number of sellers with such asks were!), and such that there were exactly l buyers who were bidding more than b. The price pb is similarly determined as the maximal ask (call it ¯ a), such that there are buyers who bid more, and l sellers who ask for less. In the con?guration above (sellers and buyers don’t know that is the con?guration) would sellers want to prepare down their costs as their asks and would buyers want to prepare down their valuations as their bids? Why or why not?

(iii) In the market system considered in part (ii) would the final allocation be Pareto efficient? Why or why not? (Do not forget to take into account important details).

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M9310

Have any Question? 


Related Questions in Microeconomics

Iowa elevatorsresponses will be in a compact format the

Iowa Elevators Responses will be in a compact format. The content of the papers should not exceed three pages in length, excluding the title page, executive summary, or any references. Title Page: Executive Summary: Give ...

Great depression economy paperwritten assignmentplease

Great depression , economy paper Written Assignment Please provide a comprehensive answer to the following two questions: 1) Which were the main causes of the Great Depression? 2) Why did the Great Depression last so lon ...

Economics and quantitative analysis assignmenttopic -

ECONOMICS AND QUANTITATIVE ANALYSIS ASSIGNMENT TOPIC - REGRESSION ANALYSIS Instructions - Background One of the biggest challenges in the higher education sector has been the recent growth of online universities. The Onl ...

Assignmentquestion a daoism amp confucianism as fisher

Assignment Question A: DAOISM & CONFUCIANISM. As Fisher states in our textbook, "Individuals often harmonize the apparently opposite characteristics of Daoism and Confucianism in their own lives." In what specific ways m ...

Goal construct a case studyresearch paper that examines a

Goal: Construct a case study/research paper that examines a firm in the U.S. from a microeconomic standpoint and provide suggestions based on your findings. Step 1: Choose a firm for your focus. In addition to picking a ...

Question 1which of the following has not been identified as

Question 1 Which of the following has NOT been identified as a basic consumer right? Consumers have a right to safe products. Consumers have a right to collude. Consumers have a right to be informed about a product. Cons ...

Assignmentscenario summarya kansas city based supplier of

Assignment Scenario Summary A Kansas City based supplier of health care information technology (HCIT) solutions has recently hired you as a Human Resource Manager. You are in charge of hiring new medical consultants for ...

Discussion questionplease read thoroughly and provide

Discussion Question Please read thoroughly and provide references • Manufactures of smartphones design products to be interactive with consumers. To remain competitive, designers are focused on getting a new product to m ...

Assignmentwhat are the most important knowledge assets at

Assignment What are the most important knowledge assets at Dirt Bikes? What functions and employee positions are responsible for creating, distributing, and using these knowledge assets? Are all of these assets explicit ...

Essay questionyour manager knows that you have completed a

Essay Question Your manager knows that you have completed a course in Purchasing and Materials Management. Your manager would like you to write an essay for your fellow workers about the key purchasing/ supply management ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen