Title Use the equilibrium of the second-price, Dutch, and English auctions to construct incentive-compatible. Description Use the equilibrium of the second-price, Dutch, and English auctions to construct incentive-compatible direct selling mechanisms for each of them in which the ex post assignment of the object to bidders as well as their ex post payments to the seller are unchanged

Title Use the equilibrium of the second-price, Dutch, and English auctions to construct incentive-compatible. Description Use the equilibrium of the second-price, Dutch, and English auctions to construct incentive-compatible direct selling mechanisms for each of them in which the ex post assignment of the object to bidders as well as their ex post payments to the seller are unchanged

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter15A: Auction Design And Information Economics

Section: Chapter Questions

Problem 6E

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Explain the differce between oral auctions and second-price auctions
TRADE. Consider a bilateral trade model with two-sided asymmetric information. The buyer's value is private information to the buyer, vB and the seller's value vs is private information to the seller. (a)Derive the linear Bayes Nash Equilibrium in a double auction. (b)Assume that the seller can credibly disclose their valuae. What is your intuition, would he want to commit to such transparency?
(4) Resource Allocation. Consider a combinatorial auction with three items {a,b,c} and three players (I, II, III. The valuations each player has for each subset of a b с ab bс ас abc I 1 2 1 6 4 11 II 3 5 3 3 5 III| 4 5 0 7 5 7 the items is shown below. What is the allocation produced under the VCG (Vickrey-Clarke-Groves) mechanism and what are the VCG payments of the players?
A cool kid is willing to rename himself for a profit. He decides to auctionoff the naming right. Two bidders show interest. Their valuations for thenaming right are independently and uniformly distributed over [0;100]:There are several possible ideas to design the auction. The auction runs as follows. Both bidders are invited to the sameroom; an auctioneer will start the auction with an initial price 0 and increase it by $1 every minute. The bidders are not allowed to say anything during the process, but they can walk out of the room at any moment. If one bidder walks out of the room when the price increases to p(the bidder does not need to pay), the remaining bidder will be awarded the naming right for a price of p. If both walk out when the price reaches p, the naming right is not assigned and the two bidders do not need to pay. What should the bidders do? Explain your answer.
- First-Price and Second-Price Auctions - Consider an auction of a single indi- visible object with 5 bidders, 1, 2, 3, 4 and 5, whose personal valuations (willingness to pay) for the object are v₁ = 10, V₂ = 8, 03 7, 04 5 and 5 3. The bidders simultaneously submit their bids and the winner is the one with the highest bid. Suppose that, when the highest bidder is not unique, the bidder with the smallest number (highest valuation) wins. (a) Suppose that this is a second-price auction, where the winner pays the highest bid among those from her opponents, determine whether each of the following bidding profiles is a Nash equilibrium. Explain. (i) (b₁,b2, b3, b4, b5) = (10, 8, 7, 5, 3) (ii) (b1,b2, b3, b4, b5) = (8,8, 0, 0, 0) (iii) (b₁,b2, b3, b4, b5) = (10, 0, 0, 0, 10) (b) Now suppose that this is a first-price auction, where the winner pays their own bid, determine whether each of the bidding profiles above is a Nash equilibrium. Explain. = =
5. Consider a modified version of the ultimatum bargaining game. The proposer's payoff is as in the standard ultimatum game. The responder's payoff is given by y + 2(y-2), where y is the responder's monetary reward, z is the proposer's monetary take. Find and report the subgame perfect equilibrium.
(a) Consider the following games which are commonly used in laboratory exper- iments on social preferences. For each: describe the game, explain how the game would be played by selfish players and summarise the main findings from the experimental evidence. i. Dictator game ii. Ultimatum bargaining game iii. Trust game (b) Carefully comment on the figure below, which shows the percentage of third parties who punish in the dictator game and is taken from Fehr and Fischbacher (2004), "Third party punishment and social norms", Evolution and Human Behavior 25(2).. Percentage of punishers E. Fehr, U. Fischbacher/ Evolution and Human Behavior 25 (2004) 63-87 100 90 80 70 60 50 40 30 20 10 0 A percentage of third parties who punish --percentage of recipients who belief that third parties punish 0 10 20 30 Dictator's transfer to recipient Fig. 1. Percentage of third parties who punished in the dictator game. 40 50 (c) Explain why anonymity of the subjects is an important feature of public good…
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1) Consider a two-person, two-commodity, pure exchange, competitive economy. The consumers' utility functions are U1 = q11912 + 12q11 + 3q12 and U2 = 9219122 + 8921 + 9q22. Consumer I has initial endowments of 8 and 30 units of Q1 and Q2 respectively; Consumer II has endowments of 10 units of each commodity. a. Determine excess demand functions for the two consumers. b. Determine an equilibrium price ratio for this economy.
A cool kid is willing to rename himself for a profit. He decides to auctionoff the naming right. Two bidders show interest. Their valuations for thenaming right are independently and uniformly distributed over [0,100].There are several possible ideas to design the auction. The auction runs as follows. Both bidders are invited to the same room; an auctioneer will start the auction with an initial price 0, and increase it by $1 every minute. The bidders are not allowed to say anything during the process, but they can walk out of the room at any moment. If one bidder walks out of the room when the price increases to p (the bidder does not need to pay), the remaining bidder will be awarded the naming right for a price of p. If both walk out when the price reaches p, the naming right is not assigned andthe two bidders do not need to pay. What should the bidders do? Explain your answer.
A cool kid is willing to rename himself for a profit. He decides to auctionoff the naming right. Two bidders show interest. Their valuations for thenaming right are independently and uniformly distributed over [0,100].There are several possible ideas to design the auction. a) The auction runs as follows. Both bidders are invited to the sameroom; an auctioneer will start the auction with an initial price 0, and increase it by $1 every minute. The bidders are not allowed to say anything during the process, but they can walk out of the room at any moment. If one bidder walks out of the room when the price increases to p (the bidder does not need to pay), the remaining bidder will be awarded the naming right for a price of p. If both walk out when the price reaches p, the naming right is not assigned and the two bidders do not need to pay. What should the bidders do? Explain your answer. (b) Both bidders are invited to submit their bids covertly (bids are non-negative real numbers).…