Auctions Exam with 100% verified questions and answers

Auctions Exam with 100% verified questions and answers With auctions you want to win the auction... - CORRECT ANSWER at the lowest possible price; With auctions you want to maximize... - CORRECT ANSWER discrepancy/difference between maximum willingness to pay and price actually paid. Auctions are used to. - CORRECT ANSWER price and allocate an increasingly wide variety of good services. Example of auction in NZ (digital TV switchover) - CORRECT ANSWER Digital TV switchover in 2014 freed up 45MHz. Scarce resource. First bidding round: Telecom: 15MHz block for $66m. Vodafone: 15MHz block for $66m. 2degrees 10MHz block for $46m. Bidding for final lot of 5MHz took place in $1m increments starting from $22m. Telecom won the bid at $83m. Auction added $261m to Crown's revenue (more than offsetting the cost of digital switchover of $157m). Milgrom ("Game Theory") - CORRECT ANSWER 2006 online auction of radio-spectrum in US. - Milgrom customised a game-theory software. - Software tracked competitors' bid to estimate their budgets for 1,132 licences on offer. - Software estimated secret WTP of bidders on specific licences. - Some were overvalued. - Milgrom directed clients to obtain patchwork of smaller, less expensive licences. - Time Warner and Corncast paid 1/3 less than competitors for equivalent spectrum; savings of $1.2 billion. What are the 4 main types of auctions? - CORRECT ANSWER 1. Ascending-bid auction. 2. Descending-bid auction. 3. First-price sealed-bid auction. 4. Second-price sealed-bid auction. What is the ascending-bid auction also known as? - CORRECT ANSWER English auction, open call.