First-price auctions have all the following properties EXCEPT
a. Highest bid wins
b. Highest bidder pays her winning bid
c. The item is won by the second-highest bidder
d. The price is set to the highest bid
QUESTION 2In equilibrium the typical investor __________
a. prefers high risk assets to low risk assets
b. prefers low risk assets to high risk assets
c. is indifferent between buying low and high risk assets
d. does not stay in the market
QUESTION 3A Vickery auction is
a. Strategically equivalent to an English auction
b. Does not need to have bidders show up at the same time or place
c. All of the above
d. None of the above
QUESTION 4Low risk stocks are usually accompanied by
a. low returns
b. no returns
c. high returns
d. no sales-no one would buy low risk stocks
QUESTION 5The optimal strategy in a Vickery auction is to
a. Bid aggressively
b. Bid above your value since you would be paying the second highest price
c. Bid exactly your value
d. Bid below your value
QUESTION 6In equilibrium, high risk stocks would typically be accompanied by
a. low returns
b. no returns
c. high returns
d. no sales-no one would buy risky stocks
QUESTION 7In Vickery auctions, the item is awarded to the highest bidder at a price set by
a. Highest bid
b. Second highest bid
c. Third highest bid
d. Cost
QUESTION 8Robert, as a baker has to work long hours and doesn't get much time with his family. Robert's boss, in order to keep Robert working at the bakery would soon have to offer him a
a. positive compensating differential
b. negative compensating differential
c. nothing can make Robert stay
d. none of the above
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