Case Study 1: Auctions and Dynamic Pricing Business Case Study

Case Study 1: Auctions and Dynamic Pricing
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Table of Contents TOC \o "1-3" \h \z \u 1.Compare and Contrast PAGEREF _Toc48952841 \h 3English and Dutch Auctions PAGEREF _Toc48952842 \h 3Sealed-bid first-price auctions and Vickery Auctions PAGEREF _Toc48952843 \h 3Surge Pricing and Congestion Pricing with Examples PAGEREF _Toc48952844 \h 42.Three Examples of Auctions in Finance, E-Commerce, and E-games PAGEREF _Toc48952845 \h 4Finance Sector PAGEREF _Toc48952846 \h 4E-Commerce Sector PAGEREF _Toc48952847 \h 5E-Game Sector PAGEREF _Toc48952848 \h 53.Type of auction used to uncover the value of the product or service PAGEREF _Toc48952849 \h 54.Advantages or disadvantages of Auctions for not-for-profit organizations PAGEREF _Toc48952850 \h 6Disadvantages PAGEREF _Toc48952851 \h 6Advantages PAGEREF _Toc48952852 \h 65.Suggest ways for-profit companies to uncover value better and increase revenue. PAGEREF _Toc48952853 \h 7References PAGEREF _Toc48952854 \h 8
“Case Study 1: Auctions and Dynamic Pricing”
1 Compare and Contrast
English and Dutch Auctions
In the case of an English auction, bidders are aware of the bids of some other sellers, which assist them to reevaluate the bids for the particular product based on the maximum bid. However, in Dutch Auctions, bidders have limited knowledge about the others bid. The Dutch auction is unique for sellers to bid for the identical items, whereas in English auction the highest bidding sets only for one product. Along with it, the English auction initiated with the lower bidding and then move towards the highest prices for the product for sale. However, Dutch auction is distinct as it initiated from the highest bidding and declined eventually due to the dropping value of product or service (Lim & Xiong, 2019). In this manner, businesses prefer English auction to earn value over time.
Sealed-bid first-price auctions and Vickery Auctions
By overviewing the research of Marszalec (2016), sealed-bid first-price auctions and Vickery Auctions are similar in case, where the highest bidder needs to pay for the product or property, and all the bidders are not aware of the prices in the auction. However, those auction practices differ from each other based on the pattern of auction. In first-price sealed bid, the bidders bid the value below the valuated price for managing the profit in case of selecting as the highest bidder in the auction because bidders are unaware of the bids in a particular auction. This auction is further considered as the blind auction. However, Vickery Auctions are written auction, in which the bidders need to submit their prices for a product without knowing the others. Correspondingly, the highest bidder needs to pay the price, but the second-highest bid to offer the market value price. This auction is worthy of limiting fraud and cheating in the auction process.
Surge Pricing and Congestion Pricing with Examples
In the situation, when there are many bidders and participants for the particular product or property, the surge price is active that multiplies the proposed bids as per the surge factor to enhance the value for respective service. It is the dynamic pricing tactic adopted by the ride-sourcing firms, including Uber and Lyft. In the case of congestion pricing, the price is not fixed and fluctuated based on the demand for a particular product or service. The peak factor model is designed as per the model of congestion pricing to manage the traffic on one spot for the public good to achieve better prices for the offered services and product (Zhang, Wu & Bei, 2018). According to Chen, Shang, Yao and Li (2020), the disruptive transportation sector is actively adopting surge pricing and congestion pricing model to limit the congested demand with the Dynamic Pricing Strategy (DPS) to maintain the transportation platforms intelligently for the trips. Uber and Lift are great examples of this system.
2 Three Examples of Auctions in Finance, E-Commerce, and E-games
With the increasing value of auctions in the global market, the auction processes are actively executed in finance, e-commerce and e-game sector for improving the value of products and services. Further, it supports traders to attain high prices of the offers with effective marketing through the auctions. Along with it, it supports businesses to connect with multiple bidders for future opportunities. The online auction further spreads the network to the global market with a compelling valuation of services and products in diverse sectors.
Finance Sector
In the finance sector, New York Stock Exchange (NYSE) is the substantial example of the auction market in which the buyers submit the bids as per their valuation, and the sellers offer competitive services in terms of shares, stock and other financial products at the similar time to commence trade with the auction (Friedman, 2018). With this process, the sellers attain an outstanding value of the offers.
E-Commerce Sector
In the e-commerce sector, eBay actively involved in the auction process due to the most trafficked site along with Amazon and yahoo to offer great prices to the sellers under the market value for being effective in generating revenue for businesses (Lovett, 2017). Hence, eBay majority utilizes the second pricing bidding to sell the offers for truthful auctions.
E-Game Sector
On the other side, the e-game industry further utilizes an auction process. Likewise, the Car Trader Simulator game is the auction-based theory game in which the player involved in the live car trading auction for maintaining the good reputati...