A Bluff-Bidding Exercise

Autor/in	Meister, J. Patrick
Titel	A Bluff-Bidding Exercise
Quelle	In: Journal of Economic Education, 42 (2011) 2, S.168-174 (7 Seiten)Infoseite zur Zeitschrift PDF als Volltext Verfügbarkeit
Sprache	englisch
Dokumenttyp	gedruckt; online; Zeitschriftenaufsatz
ISSN	0022-0485
Schlagwörter	Microeconomics; Economics Education; Educational Games; College Instruction; Industry; Organizational Change; Incentives + Suchen Sie Ihr Suchwort? Mikroökonomie; Wirtschaftskunde; Educational game; Lernspiel; Hochschullehre; Industrie; Organisationswandel; Anreiz
Abstract	Consider an auction in which one potential buyer wishes to participate, but the other potential buyer would rather the bidding not start. However, once bidding starts, the reluctant firm participates (submits "bluff bids") simply to make the eventual winner pay more. This incentive exists when the marginal effect of the winning bid is to increase a rival's profit. In 2004, AT&T Wireless placed itself for sale in an English auction. Some predicted Vodafone would make bluff bids (to make Cingular pay more). Students experience this sort of activity in the game that this article describes. Students also learn that bluff bidding affects profits of the firms involved and therefore has important implications for stock prices of participating firms. (Contains 1 figure and 3 notes.) (As Provided).
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Erfasst von	ERIC (Education Resources Information Center), Washington, DC
Update	2017/4/10