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Question
What is the optimal strategy in a second-price, sealed-bid auction?a. Bid an amount that is equal to your reservation price.
b. Bid an amount that is greater than your reservation price because you will be paying the second-highest bid if you win.
c. Bid an amount that is less than your reservation price.
d. Bid an amount that is less than your reservation price, depending on the number of bidders.
e. If there are fewer than five bidders, bid below your reservation price. Otherwise, bid your reservation price.
Answer
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Related questions
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If there are two equal-sized firms in an industry, the Herfindahl-Hirschman index would be:
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Q:
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Q:
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Q:
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Q:
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Q:
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Q:
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Q:
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Q:
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Q:
The optimal reservation price for a seller is:
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c. managerial estimates of the lowest reservation price among buyers.
d. the average of a and b.
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Q:
What is the optimal bid for a descending-price auction if the bidder's reservation price is 8, the lowest possible bid is 3, and there are five bidders?
a. 3.
b. 6.
c. 7.
d. 8.
e. None of the above.
Q:
Regardless of the rules of an auction, the winner will pay:
a. his or her reservation price for the good at auction.
b. the true value of the good at auction.
c. the expected value of the good at auction.
d. the maximum amount that he or she is willing to pay for the good at auction.
e. the reservation price of the second highest bidder for the good at auction.
Q:
In a second-price, sealed-bid auction:
a. buyers bid against each other with a succession of increasingly higher prices until only one remains.
b. a bid is announced, and if no buyer accepts the bid in a given period of time, a new, slightly lower, bid is announced; this procedure continues until a bidder accepts the announced price.
c. each bidder submits a price that is known only to that bidder; bids are opened and the highest (lowest) bid is accepted.
d. each bidder submits a price that is known only to that bidder; bids are opened and the highest (lowest) bidder wins, but the transaction occurs at the second highest (lowest) price.
e. none of the above.
Q:
Which of the following is an example of an ascending-bid auction?
a. Sealed-bid auction.
b. Japanese auction.
c. Dutch auction.
d. Vickrey auction.
e. Rabbit auction.
Q:
Refer to the accompanying payoff matrix. Which of the following is a Nash equilibrium? a. Company A chooses Strategy 1 and Company B chooses Strategy 1.
b. Company A chooses Strategy 1 and Company B chooses Strategy 2.
c. Company A chooses Strategy 2 and Company B chooses Strategy 2.
d. Company A chooses Strategy 2 and Company B chooses Strategy 1.
e. None of the above.
Q:
If a firm has a dominant strategy:
a. its optimal strategy depends on the play of rivals.
b. its optimal strategy is always the same, even if payoffs change.
c. it is determined by the behavior of only one key rival.
d. it receives the same profits regardless of the strategy of rivals.
e. its optimal strategy is independent of the play of rivals.
Q:
A dominant strategy is one that:
a. beats all others, regardless of the opponent's choice.
b. beats all others, given the opponent's choice.
c. is beaten by all others, regardless of the opponent's choice.
d. is beaten by all others, given the opponent's choice.
e. beats at least one other, given the opponent's choice.
Q:
Consider the following decision tree. This tree illustrates hypothetical payoffs to General Mills (GM) and Quaker Oats (Q) if they engage in a price war. If GM cuts prices and Quaker Oats follows this behavior: a. GM loses $10 million.
b. Quaker Oats loses $10 million.
c. GM loses $2 million.
d. Quaker Oats loses $2 million.
e. both firms gain $3 million.
Q:
Duopolists A and B face the following demand curves: QA = 100 - 2PA + 2PB and QB = 100 - 2PB + 2PA. If both firms have zero marginal cost, what are the profit-maximizing prices and quantities?a. PA = 100, QA = 60, PB = 80, QB = 140.b. PA = 25, QA = 100, PB = 25, QB = 100.c. PA = 50, QA = 80, PB = 40, QB = 120.d. PA = 50, QA = 100, PB = 50, QB = 100.e. PA = 60, QA = 60, PB = 40, QB = 140.
Q:
Suppose duopolists in the market for spring water share a market demand curve given by P = 50 - 0.02Q, where P is the price per gallon and Q is thousands of gallons of water per day. The marginal cost of producing water is near zero for both firms. If one firm acts as a first mover, the second firm will produce:a. 0 gallons of water per day per firm.b. 625 gallons of water per day.c. 833 gallons of water per day.d. 1,250 gallons of water per day.e. 2,500 gallons of water per day.