ECON201 Auctions Test Answered

What are the 4 types of auctions - 1. Ascending bid auction 2. Descending bid auction 3. First price sealed auction 4. Second Price sealed auction What kind of 'game' is an Ascending bid auction - Sequential Briefly explain an Ascending bid auction and what information sellers can get from it - Classic type of auction, auctioneer keeps raising the price and bidders drop out as the price exceeds with WTP, sellers can establish the willingness to pay of every potential bidder other than the winner (the winner pays just above the WTP of the runner up) Briefly describe a descending bid auction and what info sellers can get from it - Where an auctioneer starts at a very high price and the first bidder to accept the price wins the auction, you establish the WTP of the winner but no one else (other than the fact you know their WTP is lower) Briefly describe a first price sealed auction and what info sellers can get from it -