Auctions case study

Document Type:Research Paper

Subject Area:Economics

Document 1

There are many forms of auction although all of them have the same goal; to sell merchandise at the highest price possible. Most auctions take place in an open ascending price auction. In this type of bid, a prospective buyer makes his/her bid against other willing buyers. The offered bid should be higher than the previous bid. Auctions are commonly applied in the public sales of commodities. The item is then sold to the highest bidder. In some cases, the seller can set a minimum price for the commodity. If the minimum amount is not reached by any bidder, the item is unsold. Auctioneers can set the difference in amount between each successive bid. An English auction is distinct from other auctions since the any current bid is availed to prospective bidders.

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A sealed first-price auction is an auction where all bidders offer their bids in sealed envelopes at the same time. The bidders cannot identify the bid made by any other individual. Bidders are only allowed to submit one bid. The bids are different since no bidder has any information on other bids. The sealed first-place auction is commonly used in companies in what is commonly referred to as tendering. Auctions have also been widely applied in selling sports merchandise. This happens mostly during sale of sporting materials which have been previously used or signed by professional sportsmen and sportswomen. The items can be sold at a very high price where most participants are mostly sport lovers. Auctions also hold a social convection purpose.

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In finance, auctions are used to generate revenue for different companies. Auctions provide a great platform for raising funds in a non-profit organization. The advantages of auctions to such organizations is that via the process of bidding, the organization can earn revenue from the money received from bidders. The organizations can bid their own products or offer a platform to auctioneer other items. Some of the funds from the sold items are allocated to the organization’s objectives and goals. Secondly the organizations get a chance to sell their mission or cause to the individuals participating in the auction. After the bidding process was over, Comcast emerged victorious with a takeover of £29. 7bn. This is the considered the biggest takeover witnessed in Europe’s media.

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