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ERIC Number: EJ775131
Record Type: Journal
Publication Date: 2007
Pages: 11
Abstractor: Author
Reference Count: 9
ISSN: ISSN-0022-0485
A Classroom Auction with Externalities: Applied to Mergers and Acquisitions
Meister, J. Patrick; Anderson, Kyle J.
Journal of Economic Education, v38 n3 p297-307 Sum 2007
The authors describe an in-class exercise in which students participate in an auction to buy US Airways. The exercise is based on events of late 1995, in which neither United nor American Airlines decided to bid for US Airways. Two teams of students participate in an English auction. Students learn that the equilibrium of the sequential game is that neither firm bid and, thereby, learn why US Airways did not sell at that time. In addition, two other teams participate in a sealed-bid auction, in which US Airways will sell in Nash equilibrium. Results typically have lined up with theoretical predictions. (Contains 1 figure and 3 notes.)
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Publication Type: Journal Articles; Reports - Descriptive
Education Level: N/A
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A