Auctions in finance, e-commerce and e-gamma

Running head: AUCTIONS AND RISK MANAGEMENT
AUCTIONS AND RISK MANAGEMENT
Name of the Student
Name of the University
Author’s Note:

AUCTIONS AND RISK MANAGEMENT
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Table of Contents
Case study 1: Auctions....................................................................................................................3
1. Compare and contrast..............................................................................................................3
a) English and Dutch auctions.................................................................................................3
b) Sealed-bid and Vickrey auction..........................................................................................3
2. Case study of Concierge Auctions Limited.............................................................................4
3. Use of auction in finance, e-commerce and e-games..............................................................5
a) Need for an auction in the product/service....................................................................5
b) Type of auction used in the product/service and why these type of auction is
appropriate for the product/service..........................................................................................5
4. Advantages and disadvantages of auctions as revenue generators for not-for-profit
organizations................................................................................................................................6
Advantages..............................................................................................................................6
Disadvantages..........................................................................................................................6
5. Ways in which the company can use auctions to better uncover value and increase revenue
.....................................................................................................................................................7
Case study 2: Case Analysis of Risk, Uncertainty and Managing Incentives.................................8
Evaluation of the recent actions dealing with risk and uncertainty:................................................8
Advice for improving risk management:.........................................................................................9
Adverse selection problem of British Airways:.............................................................................10

AUCTIONS AND RISK MANAGEMENT
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Recommendation to British Airways on minimising the negative impact of risk on transactions:
.......................................................................................................................................................11
Strengthening its portals:...........................................................................................................11
Partnering with the airline companies:......................................................................................11
Moral hazard problem of data security risk and suggested best practices in the industry to deal
with it.............................................................................................................................................11
Identification of principle-agent problem and tools BA uses to align incentives and improve
profitability:...................................................................................................................................12
Examination of organisational structure of BA and suggestion of ways to improve overall
profitability:...................................................................................................................................13
Conclusion:....................................................................................................................................13
References......................................................................................................................................16
Bibliography..................................................................................................................................17

AUCTIONS AND RISK MANAGEMENT
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Case study 1: Auctions
1. Compare and contrast
a) English and Dutch auctions
An English Auction is a type of auction where auctioneer introduce opening bid which
are suggested and starting price of selling item. After that, the auctioneer takes the higher bids
that are increasingly with the interest of buyers in the selling item. Here, the auction gets end
when there is no willingness of participant to bid more or when the determined price is reached
where the highest bidder make payment of the price (McGee & Levin, 2019). A Dutch Auction
is a traditional type of an auction for the purpose of buying and selling items. Here, auctioneer at
the time of selling start with asking for high price and end up with lowering the amount when the
participants welcome the price (Mridha & Bhattacharyya, 2017). The auction gets end up where
the buyers are ready to pay the price which are announced by the auctioneer. The major
difference between the two auctions is quantity.
b) Sealed-bid and Vickrey auction
First-Price Sealed Bid Auction- There is another name of First-price Sealed Bid Auction
which is Blind Auction. This auction is much more different from other types of auction. There
are many valuable and broad range of items from properties that are included in first-price sealed
bid auctions which are costly for both individuals and businesses. There is an existence of only
one chance to bid in this type of auction for the bidder (Graddy & Ashenfelter, 2019). The bid
amount of the item is written by the bidder and given to the auctioneer, which gets end up with
the amount of the highest bidder.