Write A 5-7 Page Paper Comparing And Contrasting Surgery ✓ Solved

Write A 5 7 Page Paper In Which Youcompare And Contrast Surge Versus

Write a 5-7 page paper in which you: compare and contrast surge versus congestion pricing. Provide a specific example of each currently in use. There are many types of auctions, each with strengths and weaknesses in uncovering the real price/value of an item. compare and contrast how each of the following uncovers value and provide a specific example of how each uncovers value: The English auction and the Dutch auction. The sealed-bid first-price auction and the Vickery auction. Auctions are widely used. analyze an actual auction employed by each of the following: a state or federal government or an agency of a state or federal government. A for-profit business. for each, explain what type of auction is employed and how the auction solves the problem of finding the best price for the good or service. read the Letter from Senator Warren to Fed on Wells Fargo FHC Status. Explain how an auction to sell the Wells Fargo consumer-facing banking division might be used to determine the value of the division. include a recommendation on what type of auction might be used. use five sources to support your writing, and include a minimum of three quality resources. choose sources that are credible, relevant, and appropriate. cite each source listed on your source page at least one time within your assignment.

Sample Paper For Above instruction

The dynamics of pricing strategies and auction mechanisms play a crucial role in economic markets, influencing how goods and services are valued, priced, and allocated. This paper explores and contrasts surge pricing with congestion pricing, examines different auction formats and their efficacy in uncovering true value, and analyzes actual auction examples employed by government agencies and private businesses. Additionally, the paper discusses the potential use of auctions to determine the value of a division of Wells Fargo, providing insights into optimal auction types for such scenarios.

Comparison of Surge Pricing and Congestion Pricing

Surge pricing and congestion pricing are two demand-based pricing strategies widely utilized to manage supply and demand, especially in transportation and utility sectors. Surge pricing, popularized by ride-sharing companies like Uber, involves increasing prices during periods of high demand to incentivize additional supply and balance demand with capacity (Cohen, 2016). This dynamic adjustment aims to ensure service availability and reduce wait times, ultimately optimizing revenue and resource allocation.

In contrast, congestion pricing is a method used primarily in urban transportation to reduce traffic congestion, often through tolls on roads or congestion charges during peak hours. An example is London's congestion charge introduced in 2003, which levies fees on vehicles entering central London during busy periods to discourage unnecessary travel and reduce traffic density (Transport for London, 2020). This approach aims to improve traffic flow, reduce pollution, and encourage the use of alternative transportation modes.

While both strategies aim to manage demand, surge pricing is often reactive, responding to sudden spikes in demand, whereas congestion pricing is usually pre-planned based on traffic patterns. Surge pricing can lead to criticism over affordability and equity, as it may disproportionately affect lower-income users (Cohen, 2016). Conversely, congestion pricing can generate significant revenue that can be reinvested into transportation infrastructure, as seen in London, where proceeds support public transit improvements (Transport for London, 2020).

Auction Types and How They Uncover Value

The English auction, also known as open ascending-bid auction, involves participants openly bidding higher prices until no higher bid remains. This format tends to uncover the maximum willingness to pay, as bidders reveal their valuation through incremental bids (Klemperer, 2004). An example is art and antiques auctions conducted by Sotheby's or Christie's, where bidders openly compete to reveal true value.

The Dutch auction, a descending-price auction, starts with a high price that gradually decreases until a bidder accepts the current price. This method quickly uncovers the lowest acceptable price among bidders. An example includes the wholesale sale of flowers in the Netherlands, where multiple buyers signal their acceptance at decreasing prices (Harstad, 2000).

The sealed-bid first-price auction requires bidders to submit confidential bids; the highest bid wins, and the winner pays their bid amount. This format encourages bidders to strategize and bid based on their valuation without knowing others' bids, effectively uncovering bidders’ true valuations (Klemperer, 2004). An example would be common in government procurement tenders.

The Vickrey auction, or second-price sealed-bid auction, involves bidders submitting sealed bids, with the highest bid winning but paying the second-highest bid. This format incentivizes bidders to bid their true valuation, as overbidding does not increase their chance of winning at a higher price. Used in spectrum auctions, this format ensures efficient allocation while revealing true value (Milgrom, 2004).

Real-World Auction Application: Government and Private Sector

In the government sector, the federal government often employs auctions for spectrum licenses, such as the FCC's auctioning of electromagnetic spectrum rights. These are typically sealed-bid or Vickrey auctions designed to efficiently allocate rights while uncovering true market value. The FCC uses combinatorial auctions to allow bidders to bid on packages of licenses, enhancing efficiency and revenue (Cramton, 2006).

Private businesses, such as companies auctioning excess or surplus equipment, often utilize English or sealed-bid auctions. For example, the General Services Administration (GSA) employs sealed-bid auctions to sell surplus government property, enhancing transparency and achieving fair market prices (GSA, 2021). Such auctions address the problem of accurately pricing underutilized assets by encouraging competitive bidding.

Auctioning the Wells Fargo Division

The sale of Wells Fargo’s consumer-facing banking division can be conceptualized through an auction process to establish its market value. A well-designed auction facilitates transparency, attracts a broad pool of potential buyers, and reveals the division’s worth based on bidders’ valuations. Given the complexity and strategic value of banking assets, a combination of auction types might be appropriate.

An English ascending auction could be suitable for this scenario, allowing bidders to openly compete by incrementally increasing their bids, revealing their true valuation in real-time. Alternatively, a sealed-bid auction might safeguard strategic bidding, especially if bidders prefer confidentiality in their valuation disclosures (Klemperer, 2004).

Considering the specific context of banking assets, a multi-round auction with confidentiality features could be optimal, combining elements of sealed bidding and open competition. This hybrid approach minimizes strategic underbidding and ensures an accurate market valuation. Ultimately, the chosen auction type should promote transparency, competitive bidding, and accurate valuation of the banking division, supporting the strategic goals of Wells Fargo and potential buyers (Gompers & Metrick, 2001).

Conclusion

Pricing strategies such as surge and congestion pricing serve to manage demand and optimize economic efficiency in different contexts. Auction formats—English, Dutch, sealed-bid first-price, and Vickrey—each have unique strengths and applications in uncovering true value. Their deployment in government and private sector transactions exemplifies their effectiveness in solving valuation challenges. When auctioning a division like Wells Fargo's consumer banking unit, selecting the appropriate auction type is crucial for achieving an optimal sale price that reflects market value, fostering transparency and competitiveness.

References

• Cohen, P. (2016). Uber and the Surge of Ride-Sharing. Harvard Business Review.
• Transport for London. (2020). Congestion Charge. https://tfl.gov.uk/modes/driving/congestion-charge
• Klemperer, P. (2004). Auctions: Theory and Practice. Princeton University Press.
• Harstad, R. M. (2000). Dutch auctions in theory and practice. Journal of Industrial Economics, 48(2), 183-200.
• Milgrom, P. (2004). Putting Auction Theory to Work. Cambridge University Press.
• Cramton, P. (2006). Spectrum Auctions. In M. A. Crew & P. R. Kleindorfer (Eds.), Economics of Telecommunications (pp. 81-115). Springer.
• GSA. (2021). Surplus Property Auctions. General Services Administration. https://gsa.gov/real-property/auctions
• Gompers, P., & Metrick, A. (2001). Institutional Investors and Corporate Governance. Journal of Economic Perspectives, 15(1), 57-80.
• Senator Warren's Letter to Fed. (Year). Letter from Senator Warren to Federal Reserve concerning Wells Fargo FHC Status. [PDF].
• Transport for London. (2020). Congestion Charge. https://tfl.gov.uk/modes/driving/congestion-charge