Final Exam Credit Instructions

Final Exam Credit Instructions
Spring 2015
You may read the following papers and submit your written reports on them in order to
improve your exam score, as explained in our course syllabus. Completing this work may
improve your exam score, but cannot raise your grade on attendance, homework,
the project, or other exams.
Note that if you turn in only one of these reading summaries, it must be the rst one
listed; if you turn in two, they must be the rst and second, etc. (You cannot pick and
choose between them.)
For each paper, you are provided with a list of questions. The rst question species which
parts of the paper you are expected to read, and asks for a general summary. I imagine that
an adequate summary will take approximately one half to one full typed, single-spaced page
of text1. In addition to summarizing the reading in your own words, you should answer each
of the other questions { depending on the question, a complete answer may take a sentence
or a full paragraph. If you feel unsure about whether you understand a question or whether
your answers are complete, you should feel free to talk to me about it.
The due date is Wednesday, May 20, at 5 pm for all summaries.
1. What Really Matters in Auction Design” Paul Klemperer, Journal of Economic Per-
spectives, 2002.
(a) Read the entire paper, and write your own summary.
(b) List some drawbacks and some advantages of ascending auctions, from a practical
auction design perspective.
(c) List some drawbacks and some advantages of sealed-bid auctions, from a practical
auction design perspective.
(d) Describe the Anglo-Dutch auction rules.
(e) In what circumstances will the design of an auction be less important?
2. Field Experiments on the Eects of Reserve Prices in Auctions: More Magic on the
Internet” David Reiley, RAND Journal of Economics, Spring 2006, vol. 37, no. 1, pp.
195-211.
(a) Read the entire paper and write your own summary.
(b) What question(s) was the experiment designed to answer?
(c) Describe the set-up of the experiment – the number of treatments, the auction rules
and other procedures, etc.
(d) What is a variable that could not be controlled in this experiment?
1I am not particular about the format, but if you are looking for formatting guidelines then I suggest 1
inch margins and 12 point font. The summary will be judged on whether it re
ects a thorough understanding
of the paper, not on whether it lls up a page
(e) Explain the meaning of the Cloister” price to which the article refers. Why did
this value matter?
(f) Describe the conclusions regarding the eect of reserve prices on the probability of
sale, on auction revenue, and on bidder strategy. Identify whether the experiment
results support theoretical predictions.
3. Running Up the Bid: Detecting, Predicting, and Preventing Reserve Price Shilling
in Online Auctions” John H. Kagel and Dan Levin, The Economic Journal, 103 (July
1993), 868-879.
(a) Read pages 1-21 and pages 31-34, and write your own summary.
(b) Explain why online auctions might be especially prone to seller fraud such as shill
bidding.
(c) Dene the two types of shilling mentioned in the article.
(d) List the reasons that sellers using online auction houses might be tempted to shill
bid.
(e) Explain the reasoning behind the study’s ve research hypotheses.
(f) Explain the limitations of this study.