Asked by Danielle Waggoner on Sep 24, 2024
Verified
With which choice are you more likely to avoid Bid-rigging cartels?
A) Holding Vickery auctions
B) Holding sealed-bid auctions
C) Holding English auctions
D) Both A&B
Bid-rigging
A form of fraud where competing parties conspire to determine the winner of a bidding process, undermining fairness.
Vickery Auctions
An auction format where the highest bidder wins but pays the second-highest bid, encouraging true value bidding.
Sealed-bid Auctions
A bidding process where all bidders submit their bids confidentially, with the highest bid usually winning the item or contract.
- Learn about the mechanisms and repercussions of bid-rigging cartels, plus techniques to evade them.
- Understand the role of auction type in affecting auction outcomes and bidder behavior.
Verified Answer
OG
oNHunT33 gaming4 days ago
Final Answer :
D
Explanation :
Vickrey auctions (choice A) and sealed-bid auctions (choice B) are more likely to avoid bid-rigging cartels because they make collusion among bidders more difficult. In Vickrey auctions, the highest bidder wins but pays the second-highest bid, which complicates collusion efforts. Sealed-bid auctions prevent bidders from knowing each other's bids, making it harder to rig bids. English auctions, in contrast, are open and allow bidders to see each other's bids, making it easier for cartels to operate.
Learning Objectives
- Learn about the mechanisms and repercussions of bid-rigging cartels, plus techniques to evade them.
- Understand the role of auction type in affecting auction outcomes and bidder behavior.