In previous literatures, ascending auctions were described as following, the auction starts by the auctioneer announcing a price and increases that price by time, bidders quit the auction when the price announced by the auctioneer is higher than the price they are willing to pay, the winner is the last person or the person who did not withdraw from the auction (Kagel and Levin 2008: 3, Easley and Kleinberg 2010: 250)
For further understandings, assume in an ascending price auction, the auction started with $500 which is the reserve price, one bidder placed $550, the second bidder placed $625, the third bidder placed $750, if no one bid anymore the third bidder will win and will pay his own bid ($750).
Moving to the descending price auctions or Dutch auctions as called sometimes. Descending price auction rules indicate that, the auction starts with a high price asked by the seller, unlike the English or ascending price auctions, the price keep declining until a buyer accepts to buy the item being auctioned (Cioni 2010: 3, Varian 2009: 317, Kagel and Levin 2008: 3).
Easley and Kleinberg (2010: 250) and Wolfstetter (1996: 370), agrees that in descending auctions the prices are decreasing or following a descending pattern till the buyer stops the auctioneer at a certain price that he is willing to pay by shouting “mine” or announcing that he is willing to pay that price. Easley and Kleinberg Added that the name “Dutch auction” origin is from Netherlands, where they used to sell flowers using descending price auction format.
For further understandings, assume being in a Dutch auction, but this time the auction started with $1,000 and no one showed interest in buying that item for the $1,000, the auctioneer decreased the price ...
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... member who is going to lose the auction intentionally is the main aspect that defines the extent of cartel sustainability. It sounds realistic that, if any of the cartel members finds not abiding by the cartel rules yield more profits, to cheat and not abide to those rules. Hence, a rational bidder will estimate the short term cash inflow yielded in the case of cheating and compare it with the long term loses that will be incurred as a result of not abiding with the cartel rules (Sternberg 1988: 354-357, Robinson 1985: 143-144)
Thus, it is said that bid cartels are possible and can occur. However, researchers are not sure whether that formed cartel will last for long or vanish quickly. For a stable cartel to be formed each cartel member must get high utility in return of his compliance and rank participating in the cartel as more preferable (Robinson 1985: 143-144)
Price is that which is given up in an exchange to acquire a good or service. Price is typically the money exchanged for the good or service. Blue Jays pricing structure is based on the perceived value of the game, the entertainment, the love of baseball, and the action, not just the money.
Even though monopolies are illegal, public corruption allows companies to form and continues to be a problem today. In an article published by the Los Angeles, Anh Do
200% profit. The market value of a specific home when purchased is $300,000 and rises over a certain time to $350,000. The individual pays more than 2/3’s of the payments before foreclosure occurs. The specifics of the foreclosure are uncertain; however, this will not affect the resale of...
This organization belongs to the oligopoly market structure. The oligopoly market structure involves a few sellers of a standardized or differentiated product, a homogenous oligopoly or a differentiated oligopoly (McConnell, 2004, p. 467). In an oligopolistic market each firm is affected by the decisions of the other firms in the industry in determining their price and output (McConnell, 2005, P.413). Another factor of an oligopolistic market is the conditions of entry. In an oligopoly, there are significant barriers to entry into the market. These barriers exist because in these industries, three or four firms may have sufficient sales to achieve economies of scale, making the smaller firms would not be able to survive against the larger companies that control the industry (McConnell, 2005, p.
Maximum price, also referred as price ceiling, is usually set by government to limit the seller pricing system to ensure a fair and reasonable business practice (Murcko, 2002). Price ceilings are usually set for essential expenses, such as flights in the article.
Cartels usually exist where there are agreements between incumbent firms with prices so that they can share what would be monopoly supernormal profits between them, acting as a monopoly. Firms will get together to decide to restrict the output and raise the price, for example OPEC (Organisation for Petroleum Exporting Countries). In the UK legally binding agreements in cartels are against the restrictive practices legislation and are therefore illegal. Some cartels last longer than others do as some cartels may break contracts. Some examples of cartels include Rowntrees, Cadbury's, the concrete industry with three firms (Rugby, Blue Circle and United).
Have you ever wondered why do prices end with .99 or why it is that business are always making some kind of deal? Are these deals as beneficial as the customer thinks they are? What about the items priced higher than usually. Most people tend to think the higher the price the better quality right? Well, these are some of the topics this paper is going to help you better understand. Price points, Prestige Pricing, and Odd-evening pricing are all common price games used in the business world today. Price points are the different prices stores use to manipulate the consumers into buying what they want them to buy. I am sure everyone has wondered exactly what goes into the pricing of the items they purchase or what is it about these deals that keep luring me into the stores. Price gaming is a tricky business and businesses love how well it can manipulate the customer into believe and thinking a certain way. Showing you these three common price games will help you better understand and help you evaluate your purchasing decisions a little better.
... the ticket prices are set very high and the organizers use the pricing strategy of prestige pricing to indicate that the event will be a spectacle itself. In another case, the organizers implement the price skimming strategy for matches featuring big time rivals. Matches between Real Madrid and Barcelona are charged very high to attract the best of the spectators. Therefore, the right pricing strategy depends upon the type of event or good being presented.
This is when two or more persons who want the same item and keeps bidding the price up until it reaches a fair market value. By law you most have a least two persons present to conduct an auction. Then the highest bidder buys it for the final bided price.In advertisement for auction houses that catches must people eyes is to get fast cash selling personal property. The advertisement means just that you can get money within fourteen days or less after the auction house sells your personal property. The auction business has been around for a long time with a good track record for selling anything that has a price or doesn't have a price.
A ceiling price is usually set below the EP and it benefits the buyer. The reason for a ceiling price is to help keep prices down when a certain item is in great demand. According to the basic principles of micro economics, the seller will raise the prices of products in great demand so they ( the seller) can profit the most. After all, the seller’s objective in his business is to make the most profit possible at the expense of the buyer. These government imposed prices help the buyer in the sense that the price will not soar past a certain point so that those with a lower income can still afford the item. When the ceiling price is placed above the EP, there is a chance of a short term surplus that will force the price of the item down, which in turn, will set a new EP for it.
Oligopolies have considerable control over the price market, however, when changing prices, output, or advertising each must consider the response of its rival. Just as a monopoly has entry barriers, these same barriers apply to the oligopoly as well. One significant difference in an oligopoly versus a monopoly is that the oligopoly is a common practice in the market system, whereas a monopoly is prevented through federal
Absolute lowest price for an item can be most important for many consumers but not all consumer as it depends on factors such as income distribution and product type.
A price taker can sell as much as it can produce at the existing market price.
Markets have four different structures which need different "attitudes" from the suppliers in order to enter, compete and effectively gain share in the market. When competing, one can be in a perfect competition, in a monopolistic competition an oligopoly or a monopoly [1]. Each of these structures ensures different situations in regards to competition from a perfect competition where firms compete all being equal in terms of threats and opportunities, in terms of the homogeneity of the products sold, ensuring that every competitor has the same chance to get a share of the market, to the other end of the scale where we have monopolies whereby one company alone dominates the whole market not allowing any other company to enter the market selling the product (or service) at its price.
Black markets are the underground markets that operate outside “the legal system in which either illegal goods are sold or legal goods are sold at illegal prices or terms.” Black markets are characterized with high prices, violence, and defective products. The high prices in black markets especially in comparison to legal markets, comes from the risk that the supplier is undertaking. Suppliers are taking the risk of “arrest, possibility of a fine or prison sentence, and so on.” The violence that many times characterizes black markets stems from the fact that there are “no legal channels for the peaceful settlement of disputes” and the party that does not follow through with the agreement must be made to follow the agreement, many times through the use of threats or force. Black markets undermine and undercut legal markets making for a weaker overall system in markets where black markets are more common.