The following video describes auctions as price discovery mechanisms: WATCH THE VIDEO [embedded content] There are many types of auctions each with strengths and weakness…

The following video describes auctions as price discovery mechanisms: WATCH THE VIDEO

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There are many types of auctions each with strengths and weakness at uncovering the real price/value of an item. Compare and contrast:

a) the English and Dutch auctions; and,

b) the sealed-bid, first-price auction, and the Vickery Auction.

Concierge Auctions Limited sells very high end and unique properties worldwide using an English style auction, selling to the highest bidder. They have been embroiled in multiple lawsuits see the link to the Wall Street Journal:

a)Advise Concierge as to the weakness that an English auction may have in uncovering a property’s value.

b) Provide a recommendation for at least one other auction type which may better uncover the value of unique real estate properties.

Auctions are widely used in finance, e-commerce and in e-games. Identify 3 uses of auctions by firms in finance, e-commerce and/or e-games. Explain the:

a) need for an auction in the product/service, and

b) what type of auction is used and why that type of auction is appropriate for the product/service.

Sample Solution

The legal relationship between the parties must be clear. The Consumer Rights Act 2015 (CRA) defines a consumer as “an individual acting for the purposes that are wholly or mainly outside that individual’s trade, business, craft or profession”. As evident by the facts, there is a construction of a contract for supply of services between Sandeep as the consumer, and the Tiptoe Movers as the traders for the purpose of the CRA 2015. Quality of service under statutory law A supply of service must be of satisfactory quality under the CRA 2015 whereby standards of service performed by Tiptoe Movers must therefore legally satisfy. Section 49 of the CRA 2015 determines that the standard of services performed must conform to reasonable care and skill. The service performed must be completed in accordance to the information agreed upon with the consumer whereby the consumer relies on this information. Although strict liability can occur regarding price and time for a service, reasonable care and skill required cannot be excluded under the CRA 2015 and other limitations may be subject to a fairness-test. Such test may consider the extent to which then specific terms appear ‘transparent and prominent’. Since the CRA 2015 does not intend to challenge prices of a contract, “a fixed sum of no more than the total contract price” may appear relative but not necessarily unfair. Sandeep and Daniel will argue that the mentioned duty of care has not been followed through by the Tiptoe Movers nor did the task performed follow the instructions of the service, if assuming exchange of information took place pre-contract (Sandeep’s telephone conversation), or as stated in the contract. The lack of reasonable care and skill is supported by the fact that the Tiptoe Movers arrived hours later then agreed on and the service was also not fully complete by the fact of not placing all the belongings where it was decided.>GET ANSWER Let’s block ads! (Why?)

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