Suppose there are 3 risk-neutral bidders that are, Ask an Expert

Economics

Suppose there are 3 risk-neutral bidders that are interested in purchasing a Pablo Picasso painting at an auction. The bidders have valuations for the painting of $8 million, $10 million, and $15 million. The bidders do not know each other's valuations. Bids can be in thousand dollar increments.

a) For each of the three auctions listed below, explain which bidder will win, what will be the final bid-price that is paid to the seller, and what will be the final profits for each of the three bidders. Fully explain your answers and any assumptions you make.

i) Open-cry English auction

ii) Second-price sealed-bid Vickery auction

iii) First-price sealed-bid auction

b) Contrast your answers for the three auctions. Fully explain what the cause of any differences was.

c) If you were the seller of the Picasso painting, which auction would you prefer? Explain.

View complete question

Business Economics, Economics

Category:- Business Economics
Reference No.:- M91677698

Have any Question?Write your Review or question?

Related Questions in Business Economics

Doctor wants the estimate the hdl cholesterol of all 20 to

Doctor wants the estimate the HDL cholesterol of all 20 to 29 year old females. How many subjects are needed to estimate the HDL cholesterol within 3 points with 99% confidence assuming o=18.2? Suppose the doctor would b ...

1 a cpu manufacturing company knows based on the machines

1. A CPU manufacturing company knows, based on the machines working at maximum productivity, that 90% of the CPU's coming off the line meet quality standards. The quality control inspector pulls 25 CPU's off the line to ...

How do changes in income affect consumption and savingwhat

How do changes in income affect consumption (and saving)? What are factors other than income that can affect consumption?

When a country is closed qconsumed qproduced when a country

When a country is closed, Qconsumed= Qproduced. When a country opens to trade, this condition is not necessarily true; what condition must hold?

Advertisements suggest that a new window design can save

Advertisements suggest that a new window design can save $400 per year in energy cost over its 30-year life. At an initial cost of $8,000 and zero salvage value, using IRR, is this window a good investment? MARR is 8%.

There is a proposal for a new special economic zone in new

There is a proposal for a new Special Economic Zone in New Jersey. Based on the other examples of SEZs that we have read about, what are the pros and cons of this policy for various stakeholders?

This weekend martha has time to read 40pages of economics

This weekend, Martha has time to read 40pages of economics and 30pages of sociology. Alternatively, she could read 10pages of economics and 90pages of sociology. Which of these equations describes all combinations of pag ...

What is the factors that determine wages which are largely

What is the factors that determine wages which are largely responsible for determining how the economy's total income is distributed among the various members of society?

Lucinda buys a new gaming system for 500 she receives

Lucinda buys a new gaming system for? $500. She receives consumer surplus of? $175 from the purchase. How much does Lucinda value her GPS? system?

Calculate the present worth of all costs for a

Calculate the present worth of all costs for a newly acquired machine with an initial cost of $30,000, no trade-in value, a life of 15 years, and an annual operating cost of $13,000 for the first 4 years, increasing by 1 ...

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

Recent Questions

Ask Business Economics Expert