9781118041581

Summary 697 SUMMARY Decision-Making Principles By maximizing the number of competitors and letting price be determined by “what ...

sealed bid auction. (Hint:Check that the bidder cannot gain by either understating or overstating his or her reservation price i ...

Summary 699 b. Now suppose that you face two other bidders and believe that a typical competitor’s valuefor the building lies be ...

each other and that, for each buyer, values between $200,000 and $260,000 are equally likely. a. How should the renter decide wh ...

Summary 701 c. Suppose buyer 1 offers to buy the bowl from buyer 2 and they negotiate a sale price of $600. Again, calculate the ...

702 Chapter 16 Auctions and Competitive Bidding TABLE A Bid Success by Markup Markup Number of Bids Number of Winning Bids 30% 7 ...

Summary 703 b. Suppose, instead, that the government sets a fixed-price contract, and the firms submit total cost bids. Which fi ...

percent would receive the more favorable 4.5 percent interest rate (as would all the other winning bidders). In this respect, th ...

Summary 705 Suggested References The following articles discuss real-world auction applications. Bajari, P., and A. Hortacsu. “E ...

just outbidding the highest possible bid of firm 2. In sum, firm 1’s equilibrium bidding does very well (is nearly optimal), eve ...

A portfolio manager has $20 million to invest in a fund consisting of the following bonds: Maturity Yield Bond Category Quality ...

The manager intends to create a bond fund by investing proportions of the $20 million in the different securities and has announ ...

Linear Programs 709 saved. Third, constraints limit the possible values of the decision variables. For example, limited labor su ...

and necessary equipment) for producing DVD drives and hard-disk drives. The firm’s maximum weekly outputs are 200 DVD drives and ...

Linear Programs 711 For instance, producing 100 of each model per week would require a total of (80)(100) (40)(100) 12,000 gig ...

Let’s apply this procedure to solve the computer company’s production problem. Figure 17.1 plots the firm’s decision variables, ...

Linear Programs 713 line BB.^2 Finally, the binding labor constraint is given by the equation 5S  5E 2,000 and is graphed as ...

increase its profit by switching a second unit (by exactly the same logic). It can continue to increase its profit by moving alo ...

Linear Programs 715 A Minimization Problem The production problem the PC company faces is typical of a large class of profit-max ...

The first inequality reflects the fact that the programs together must increase oxygen by 6 mg/liter. The right-hand side lists ...