Asked by Furqaan Sayed on Jun 13, 2024
Verified
Bid-rigging is less likely in
A) oral auctions
B) English auctions
C) first-price sealed-bid auctions
D) all are equally likely
Oral Auctions
A traditional auction in which bids are made by participants aloud in the presence of an auctioneer.
First-Price
Refers to an auction format in which the highest bid wins, and the winner pays the amount they bid.
Bid-Rigging
A form of fraud in which a commercial contract is promised to one party even though for the sake of appearance several other parties also present a bid.
- Understand the function of collusion activities, including bid-rigging, and their influence on the outcomes of auctions.
- Understand the concept and outcomes of sealed-bid versus open auctions.
Verified Answer
SP
Shykecema PaigeJun 16, 2024
Final Answer :
C
Explanation :
First-price sealed-bid auctions are less likely to have bid-rigging because each bidder submits only one secret bid, making it difficult for bidders to coordinate their pricing strategies. In contrast, oral auctions and English auctions allow bidders to observe each other's bids and potentially collude to manipulate the price in their favor.
Learning Objectives
- Understand the function of collusion activities, including bid-rigging, and their influence on the outcomes of auctions.
- Understand the concept and outcomes of sealed-bid versus open auctions.