Reserve Auctions Discussion
Business Finance
3 pages in total, with harvard style referencing wherever applicable.
Question again:
(A) What are the trade-offs involved when an auctioneer sets a reserve price (or minimum bid) in an auction? Should a reserve price be set? At what level? Should that reserve price vary according to the number of bidders?
(B) Referring to a practical example, documented wherever possible with facts, explain how the seller of an object (or a buyer, if you wish instead to consider a tendering situation) might set the reserve. Are the reserve prices that you have seen in reality consistent with your answer to part (A) of this question?
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