Economics

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For each paper, you are provided with a list of questions. The first question specifies whichparts of the paper you are

expected to read, and asks for a general summary. I imagine thatan adequate summary will take approximately one half to

one full typed, single-spaced pageof text, and two pages for each question (1inch margins and 12 point font). In addition

to summarizing the reading in your own words, you should answer eachof the other questions–depending on the question, a

complete answer may take a sentenceor a full paragraph.

1. What Really Matters in Auction Design” Paul Klemperer, Journal of Economic Perspectives, 2002.

http://cramton.umd.edu/econ415/klemperer-what-really-matters-in-auction-design-jep-2002.pdf

(a) Read the entire paper, and write your own summary.
(b) List some drawbacks and some advantages of ascending auctions, from a practicalauction design perspective.
(c) List some drawbacks and some advantages of sealed-bid auctions, from a practicalauction design perspective.
(d) Describe the Anglo-Dutch auction rules.
(e) In what circumstances will the design of an auction be less important?

2. Field Experiments on the Effects of Reserve Prices in Auctions: More Magic on theInternet” David Reiley, RAND

Journal of Economics, Spring 2006, vol. 37, no. 1, pp.195-211.

http://davidreiley.com/papers/MinimumBids.pdf

(a) Read the entire paper and write your own summary.
(b) What question(s) was the experiment designed to answer?
(c) Describe the set-up of the experiment – the number of treatments, the auction rulesand other procedures, etc.
(d) What is a variable that could not be controlled in this experiment?
(e) Explain the meaning of the “Cloister” price to which the article refers. Why didthis value matter?
(f) Describe the conclusions regarding the effect of reserve prices on the probability ofsale, on auction revenue, and on

bidder strategy. Identify whether the experimentresults support theoretical predictions.

3. Running Up the Bid: Detecting, Predicting, and Preventing Reserve Price Shilling
in Online Auctions” John H. Kagel and Dan Levin, The Economic Journal, 103 (July
1993), 868-879.

http://misrc.umn.edu/workingpapers/fullpapers/2003/0304_022003.pdf

(a) Read pages 1-21 and pages 31-34, and write your own summary.
(b) Explain why online auctions might be especially prone to seller fraud such as shillbidding.
(c) Define the two types of shilling mentioned in the article.
(d) List the reasons that sellers using online auction houses might be tempted to shillbid.
(e) Explain the reasoning behind the study’s five research hypotheses.
(f) Explain the limitations of this study.

 




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