ECO 550 Managerial Economics And Globalization, Case Study 1: Auctions

Case Study 1: Auctions Name Professor ECO 550: Managerial Economics and Globalization Date The English Auctions vs. the Dutch Auctions In an English auction, bidders openly bid against each other in efforts to acquire property. The bid increases progressively, and the sale is made to the highest bidder (Klemperer, 2018). On the other hand, the Dutch auction involves the gradual decrease of a property price and the sale manned to the first bidder to take the price. Although the two follows a different format and procedure, the property goes to the bidder willing to offer the highest amount of money. Notably, the English auction has many emotions compared the Dutch sale (Einav, Farronato, Levin, & Sundaresan, 2018). The pressure, as well as the urgency experienced in the English auction, may not be seed in a Dutch auction. The idea is that the English auction uses emotion as an advantage in purchasing at auction (Krasnokutskaya, Terwiesch, & Tiererova, 2016). The sellers push the prices beyond the ones realized in Dutch auctions. It means therefore that the Dutch auction may only be beneficial where the purchase is not subjected to emotion but wide variance in value opinion.