tailieunhanh - Ebook Intermediate microeconomics - A modern approach (8E): Part 2

(BQ) Part 2 book "Intermediate microeconomics - A modern approach" has contents: Auctions, technology, profit maximization, cost minimization, cost curves, firm supply, industry supply, monopoly behavior, factor markets, oligopoly, game theory,. and other contents. | CHAPTER 17 AUCTIONS Auctions are one of the oldest form of markets, dating back to at least 500 BC. Today, all sorts of commodities, from used computers to fresh flowers, are sold using auctions. Economists became interested in auctions in the early 1970s when the OPEC oil cartel raised the price of oil. The . Department of the Interior decided to hold auctions to sell the right to drill in coastal areas that were expected to contain vast amounts of oil. The government asked economists how to design these auctions, and private firms hired economists as consultants to help them design a bidding strategy. This effort prompted considerable research in auction design and strategy. More recently, the Federal Communications Commission (FCC) decided to auction off parts of the radio spectrum for use by cellular phones, personal digital assistants, and other communication devices. Again, economists played a major role in the design of both the auctions and the strategies used by the bidders. These auctions were hailed as very successful public policy, resulting in revenues to the . government of over twenty-three billion dollars to date. Other countries have also used auctions for privatization projects. For example, Australia sold off several government-owned electricity plants, and New Zealand auctioned off parts of its state-owned telephone system. 316 AUCTIONS (Ch. 17) Consumer-oriented auctions have also experienced something of a renaissance on the Internet. There are hundreds of auctions on the Internet, selling collectibles, computer equipment, travel services, and other items. OnSale claims to be the largest, reporting over forty-one million dollars worth of merchandise sold in 1997. Classification of Auctions The economic classification of auctions involves two considerations: first, what is the nature of the good that is being auctioned, and second, what are the rules of bidding? With respect to the nature of the good, economists distinguish between .